NOTICE: This opinion is subject to formal revision before publication in the
bound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C.
20570, of any typographical or other formal errors so that corrections can
be included in the bound volumes.
Merck, Sharp & Dohme Corp. and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union Local 10-580, AFL–CIO,
CLC.
Merck, Sharp & Dohme Corp. and Local 94c, International Chemical Workers Council of the United Food and Commercial Workers International
Union, AFL–CIO.
Merck, Sharp & Dohme Corp. and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 4-575, AFL–CIO, CLC.
Cases 05–CA–168541, 06–CA–163815, and 22–
CA–168483
May 7, 2019
DECISION AND ORDER
BY CHAIRMAN RING AND MEMBERS MCFERRAN
AND EMANUEL
On December 20, 2016, Administrative Law Judge
David I. Goldman issued the attached decision. The Respondent filed exceptions, a supporting brief, and a reply
brief.1 The General Counsel and the Charging Parties2
filed answering briefs.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings, and conclusions only
to the extent consistent with this Decision and Order.
This case arises out of Merck’s decision to offer a onetime paid holiday, referred to as “Appreciation Day,” on
September 4, 2015 (the Friday before Labor Day) to all
its employees except for employees in the United States
1 On February 17, 2017, the Respondent also filed a motion to reopen the record to adduce additional evidence relevant to the Respondent’s due process claim. In its motion, the Respondent asserts that the
judge found a violation on a theory of animus that was neither pled in
the complaint nor litigated at trial. In light of our decision to dismiss
the complaint, we deny the Respondent’s motion as moot.
2 The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Locals
4–575 and 10–580, AFL–CIO, CLC and the International Chemical
Workers Council of the United Food and Commercial Workers International Union, AFL–CIO, Local 94C (hereinafter collectively referred to
as “the Unions”) jointly filed one brief.
367 NLRB No. 122
covered by a collective-bargaining agreement lacking
that benefit (“covered employees”). The judge found
that Merck’s decision to exclude covered employees was
motivated by the Unions’ prior refusal to agree to midterm contract modifications sought by Merck, including
proposed changes to the administration of payroll and
401(k) benefits and how year-end holidays are “completed.” The judge found that “this motive represents
straightforward punishment of union employees in retaliation for past protected activity under the Act” and that
Merck violated Section 8(a)(3) and (1) by withholding
Appreciation Day from most of its unionized employees.
Merck excepts to the judge’s finding. We find merit in
those exceptions.
Contrary to the judge, we find that the General Counsel failed to demonstrate that Merck’s refusal to offer
Appreciation Day to covered employees was unlawfully
motivated. We also find that the judge erred in finding
that statements made by Riverside Plant Manager Brian
Killen explaining Merck’s rationale for refusing to offer
the Appreciation Day independently violated Section
8(a)(1) of the Act.
I. BACKGROUND
Merck is an international pharmaceutical company,
employing 67,000 employees worldwide, 23,000 of
whom work in the United States. Of the 23,000 U.S.
employees, 2700 are represented in 9 bargaining units,
each with its own labor agreement and local union. The
individually represented units include: two units in
Rahway, New Jersey; one unit in Riverside, Pennsylvania; three units in West Point, New Jersey; two units in
Elkton, Virginia; and one unit in Kenilworth, New Jersey. Each of the nine bargaining units separately negotiated its collective-bargaining agreement with Merck, and
the several agreements had different terms covering holidays and varying expiration dates. In the spring of 2015,
Merck was not actively engaged in bargaining with any
of the units. However, Merck had recently concluded
negotiations at the Rahway and Elkton facilities a few
months prior and was preparing to start collective bargaining at West Point before that contract expired in
April 2016.3
3 By late 2014, Merck’s Executive Director of U.S. Labor Relations
Tony Zingales had discontinued the Respondent’s prior multi-facility
bargaining practice, instead opting to negotiate with each of the nine
bargaining units individually. Zingales explained that “master bargaining is not in the best interests of the company and not effective on a
location-by-location basis.” As a result of this individualized approach
to bargaining, and because the contracts expired on a rolling basis, the
Respondent was engaged in collective bargaining with one or another
of the nine units nearly every year.
2
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
In the spring of 2015,4 Merck reviewed its quarterly
business results and found that its profits had exceeded
expectations. As a result, CEO Kenneth C. Frazier asked
his human resource professionals to come up with a way
to thank the company’s employees. After consulting
with several of his top global benefit executives, Frazier
decided to grant a one-time paid day off to show the Respondent’s appreciation for the employees.
On July 28, in a town hall video meeting for the entire
company, Frazier announced his intent to make September 4 a company-wide paid holiday known as Appreciation Day. Frazier explained that this holiday was intended to give special recognition for employees’ hard work
and to celebrate great company performance. The slide
show accompanying the presentation indicated that the
Appreciation Day did not apply to “those in US who are
covered by [a] collective bargaining agreement.”
Immediately thereafter, union officials and some employees began objecting to Merck’s exclusion of covered
employees in a variety of ways. Union-represented employees discussed whether they should decline to cooperate with an upcoming safety survey and cease participating in voluntary emergency service groups vital for
plant operations. Several represented employees and
union officials commented on Merck’s intranet comment
board in protest of the exclusion. Additionally, West
Point local union president Daniel Bangert wrote an open
letter to the Respondent’s leadership expressing the Union’s objection to the decision to exclude covered employees from receiving the Appreciation Day benefit.
On July 31, Frazier responded to Bangert by email,
stating that “there are constraints on implementing unilateral changes—for better or for worse—for employees
covered by a collective bargaining agreement.” Likewise, Elizabeth Goggin, Merck’s head of Global Labor
Relations, responded to comments from various employees on an internal Company website. In her post, Goggin
recognized that the Respondent “could have been clearer
in acknowledging the constraints of collective-bargaining
agreements in our initial communication about Appreciation Day.” She went on to explain that “[c]hanges, for
better or worse, cannot be made by the Company unilaterally unless there is a provision allowing for such
changes.”
At the request of Riverside Plant Manager Brian
Killen, on August 3, the Respondent conducted a teleconference between several plant managers and Merck’s
Executive Director for U.S. Labor Relations, Tony Zingales. Killen and other plant managers asked for a justification for the exclusion and whether the Respondent
4
All dates hereafter refer to 2015, unless otherwise indicated.
intended to negotiate with the unions about it. Based on
Killen’s credited testimony at the hearing, the judge
summarized Zingales’ response to Killen as follows:
Zingales told them that the benefit is not in the labor
contracts “and we can’t unilaterally give the day.”. . .
[In addition,] [t]he “feedback that we got was that . . .
in the previous couple of years that the company had
made changes to the non-CBA employees. . . relatively
simple changes” such as “how they administer payroll
and 401(k) and how they complete year end holidays.”
Zingales explained to Killen and the managers that
these changes were made for nonunion employees but
when “they tried to discuss them with the union outside
of contract negotiations . . . the fee[dback] from the union was . . . wait until contract negotiations.” Killen
agreed that Zingales told him that the union’s refusal to
cooperate in agreeing to these “minor changes” in recent years was the reason that “Merck was not inclined
to approach the union in offering the appreciation day”
or to “just give it to the unions.”5
On August 21, several local union presidents wrote a
joint letter to Merck’s CEO, referencing prior instances
where the Respondent had included union-represented
employees in company-wide holidays, and requesting
that the unit employees receive the benefit.6 The Respondent never directly responded to this request, except
to reiterate that “constraints on implementing unilateral
changes” prevented the Respondent from granting unionrepresented employees the day off.
On September 4, the Respondent granted Appreciation
Day to all employees, except those employees who were
covered by a collective-bargaining agreement that did not
contractually entitle them to the paid day off. The Respondent granted Appreciation Day to unionized employees at its Kenilworth facility because the collectivebargaining agreement in place there entitled unit employees to any benefit given to the nonunion employees at
that location. Also, the collective-bargaining agreement
covering employees represented by Service Workers
International Union, Local 10-00086 at West Point included September 4 as a negotiated “floating” holiday.
(Jt. Exh. 8.) As to all other unionized employees, the
Respondent stood pat on the paid holidays it had negoti5 The Respondent filed no exceptions to the judge’s finding that
Killen’s testimony (and Zingales’ statements) constituted admissions
by agents acting within the scope of their employment, pursuant to
Federal Rules of Evidence 805 and 801(d)(2)(D). The judge also noted
that the Respondent made no hearsay objections to this testimony.
6
The judge noted three occasions where Merck had previously
granted represented employees a paid day off from work along with
unrepresented employees after consulting with the unions: January 2,
1998, Martin Luther King Day in 2006, and January 2, 2009.
MERCK, SHARP & DOHME CORP.
ated with the Unions. That is, the Respondent did not
offer to engage in midterm bargaining with the Unions
over expansion of their negotiated holiday benefits.
Starting on November 8, several of the Unions filed a
series of unfair labor practice charges against the Respondent. On June 30, 2016, the General Counsel issued
an order consolidating these cases, a consolidated complaint, and notice of hearing alleging that the Respondent
violated Section 8(a)(3) and (1) of the Act. The judge
found the violation, reasoning that the General Counsel
proved that the Respondent withheld the benefit from
most of its unionized employees “because the unions
failed to accede to the Respondent’s will and make midterm changes to the contract requested in the past.” According to the judge, “this motive represents straightforward punishment of union employees in retaliation for
past protected activity under the Act.” For the reasons
explained below, we reverse the judge and dismiss the
complaint.
II. ANALYSIS
Contrary to the judge, we find that the General Counsel has failed to show that the Respondent discriminated
in violation of Section 8(a)(3) and (1) when it granted
Appreciation Day to unrepresented employees, while
refusing to offer the benefit to most of its represented
employees. The Board has long recognized that an employer has a right to treat represented and unrepresented
employees differently, so long as the different treatment
is not discriminatorily motivated. Shell Oil Co., 77
NLRB 1306, 1310 (1948). In Shell Oil, the Board rejected the General Counsel’s argument that three oil companies had unlawfully denied wage increases to represented
employees while granting increases to unrepresented
employees. The Board explained:
Absent an unlawful motive, an employer is privileged to
give wage increases to his unorganized employees, at a
time when his other employees are seeking to bargain
collectively through a statutory representative. Likewise, an employer is under no obligation under the Act
to make such wage increases applicable to union members, in the face of collective bargaining negotiations
on their behalf involving much higher stakes.
Id. at 1310. Thus, it has long been established that “the
mere fact that different offers are made or that different benefits are provided does not, standing alone, demonstrate
unlawful motive.” Sun Transport, Inc., 340 NLRB 70, 72
(2003); see also Empire Pacific Industries, 257 NLRB
1425, 1426 (1981); B.F. Goodrich Co., 195 NLRB 914,
914-915 (1972). The quintessential case of unlawful discrimination in this context involves an employer that grants
a benefit to its unrepresented employees but withholds that
3
benefit from its represented employees because they elected
a union to represent them. See, e.g., KAG-West, LLC, 362
NLRB 981 (2015) (finding that employer unlawfully withheld wage increase from newly represented employees because they had recently elected a union).7
In order to determine whether the Respondent’s decision to deny represented employees Appreciation Day
was unlawful, the Board applies the Wright Line framework.8 The burden is on the General Counsel to initially
establish that union or other protected concerted activity
was a substantial or motivating factor in the employer's
decision to take adverse employment action against employees. Specifically, the General Counsel bears an initial burden to show (1) union or protected concerted activity, (2) employer knowledge of that activity, and (3)
union animus on the part of the employer. Adams & Associates, Inc., 363 NLRB No. 193, slip op. at 6 (2016),
enfd. 871 F.3d 358 (5th Cir. 2017); Libertyville Toyota,
360 NLRB 1298, 1301 (2014), enfd. 801 F.3d 767 (7th
Cir. 2015). If the General Counsel meets his initial burden, the employer can prevail by showing “it would have
taken the same action in the absence of the unlawful motive.”9 Assuming that the General Counsel met the first
two prongs of its initial burden under Wright Line, we
find that the General Counsel did not show that Merck’s
decision to treat represented employees differently than
unrepresented ones was motivated by union animus.
The Respondent gave two reasons for not awarding
Appreciation Day to the represented employees: (1) it
was not inclined to approach the Unions to bargain over
granting this additional benefit because the Unions had,
in the past, refused to agree to the Respondent’s requested midterm contract changes, and (2) unilaterally granting the benefit would violate the Act. As stated above,
the judge found that the Respondent’s admitted reliance
on the Unions’ past refusal to agree to midterm contractual changes was direct evidence of its retaliatory intent.
The judge further found that Zingales’ assertion that unilaterally giving represented employees Appreciation Day
would have violated the Act was pretextual—that is,
false or not in fact relied upon—and evidence of animus
because, in the judge’s view, the Respondent could have
7 Neither the judge nor the dissent cites a case in which an employer
was found to have violated the Act by granting a benefit to its unrepresented employees but not its unionized employees because the latter
group’s union had previously denied the employer’s requests to bargain
over mid-term modifications. We are aware of no such precedent.
8 251 NLRB 1083 (1980), enfd. 662 F.2d 889 (1st Cir. 1981), cert.
denied 455 U.S. 989 (1982), approved in NLRB v. Transportation
Management Corp., 462 U.S. 393 (1983).
9 Flamingo Las Vegas Operating Co., 360 NLRB 243, 244 (2014)
(internal citations omitted).
4
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
and should have requested midterm bargaining from each
individual Union. We disagree on both counts.
We find that the Respondent’s first justification for the
denial of Appreciation Day to unit employees is devoid
of animus. The judge’s conclusion that the Respondent
engaged in “straightforward punishment” when it considered the Unions’ prior refusal to entertain proposed
midterm modifications simply fails to take into consideration the everyday realities of the bargaining process.
“Collective bargaining by its very nature is an ‘annealing
process hammered out under the most severe and competing forces and counteracting pressures.’” Chevron Oil
Co. v. NLRB, 442 F.2d 1067, 1074 (5th Cir. 1971) (quoting NLRB v. Dalton Brick & Tile Corp., 301 F.2d 886,
895 (5th Cir. 1962)). The process, by its nature, may
involve hard negotiation, posturing, brinkmanship, and
horse trading over a long period of time. Given this
backdrop and the Board’s historical tolerance for such an
“annealing process” (so long as it does not cross the line
into unlawful threats or bad faith), Zingales’ articulation
of the Respondent’s rationale was not an admission of
unlawful retaliation. Consideration of prior bargaining
positions and extant contractual benefits is not unusual in
the course of a collective-bargaining relationship, nor is
it evidence of an employer’s antiunion animus.
We find support for our decision in Sun Transport, 340
NLRB 70 (2003). In Sun Transport, the Board found
that an employer did not violate the Act when it offered
represented employees a less generous severance package than it offered to unrepresented employees even accepting that the different treatment was motivated by the
union’s prior bargaining positions. Id. at 72. In Sun
Transport, the parties had been bargaining over a successor collective-bargaining agreement for several months
when the employer decided to divest itself of the part of
its business in which both groups of employees—
represented and unrepresented—worked. Bargaining
continued and included the issue of severance pay. The
employer offered its unionized employees 1 week of severance pay for each year of service up to 20 years. At the
same time, the employer separately offered to its nonunion workers 2 weeks of severance pay for each year of
service up to 20 years. When the union asked the employer to explain its different treatment, the employer
sent the union a letter stating that it had considered how
unresponsive the represented employees had been to the
employer’s past efforts to contain costs and improve its
competitive position. In particular, the employer noted
that, during their bargaining over a successor contract,
the parties were unable to reach agreement on some of
the employer’s proposals, resulting in continued high,
uncompetitive costs. Id. at 71. Ultimately, the parties
did not reach agreement and the unionized employees
received no severance benefit.
The judge in Sun Transport found the letter’s explanation to be an admission that the employer had retaliated
against the union for bargaining positions taken in the
past and that the disparate treatment was therefore unlawful. The Board disagreed and dismissed the complaint. The Board found that the employer’s letter did
not demonstrate antiunion animus. Id. at 72. According
to the Board, it was not clear that the union’s past bargaining position was the basis of the lower severance pay
offer (as opposed to the high costs resulting from that
bargaining position). Importantly, however, the Board
also held that “[e]ven if the severance pay offer was
based on the [u]nion’s bargaining position during the
negotiations for a successor contract, we would still find
no violation of the Act.” Id. (emphasis added). The
Board noted that the issue of severance pay arose during
comprehensive bargaining over a successor contract and
that the employer sought to use the severance pay issue
to force concessions in other areas. As such, the severance offer was “but one element of the ‘competing forces
and counteracting pressures’ inherent in the collective
bargaining process,” rather than evidence of bad-faith
bargaining. Id. (internal citations omitted). Consequently, the Board concluded that the employer’s consideration of the union’s bargaining position did not demonstrate antiunion animus.
Similarly here, we find that the Respondent’s reliance
on the Unions’ prior bargaining position—their refusal to
accept the Respondent’s proposed midterm modifications
to year-end holidays and other matters—does not
demonstrate antiunion animus. Rather, it was, in the
parlance of Sun Transport, part of the competing forces
and counteracting pressures inherent in the bargaining
process. The message sent by the Respondent’s action
was clear: if the Unions were unwilling to entertain proposed midterm modifications and insisted on adhering to
the terms of the contracts, the Respondent, too, would
stand firm, and the Unions were going to have to live
with the limitations of their contractual benefits along
with their advantages. 10
10 Our dissenting colleague asserts that the Respondent’s failure to
offer the bargaining strategy justification prior to the hearing is evidence of pretext. We disagree. In our view, the Respondent clearly
articulated at the time of the decision that it was not willing to give
away a holiday during mid-term bargaining because the Unions had
been unwilling to entertain past proposed midterm modifications. That
the Respondent did not call the justification a “bargaining strategy” at
the time does not render its more precise hearing explanation pretextual. Zingales’ August 3 statement that “Merck was not inclined to approach the union in offering the appreciation day” or to “just give it to
the unions” is evidence of a contemporaneous reference to its bargain-
MERCK, SHARP & DOHME CORP.
The judge distinguished Sun Transport on two
grounds, neither of which we find persuasive. First, the
judge asserted that here, unlike there, the Respondent’s
different treatment of union and nonunion employees
was not shown to be based on “costs” or “uncompetitiveness” resulting from the Unions’ prior bargaining
position (i.e., their adherence to the existing contracts in
the face of a request by the Respondent for midterm
changes). However, in Sun Transport the Board found
that the employer merely expressed its belief that the
union’s bargaining position had led to higher costs,
which in turn were “a factor” contributing to the employer’s disparate severance offers. The Board ultimately
found that it could not say whether the Union’s bargaining position was the basis for the disparate offers. Importantly, however, the Board then found that, even assuming the disparate offers were “based upon the
[u]nion’s bargaining position,” the Board would still find
no violation. Id at 72.
Second, the judge and our dissenting colleague distinguish Sun Transport on the ground that here, unlike
there, the parties were not engaged in bargaining over a
successor collective-bargaining agreement when the Respondent treated union and nonunion employees differently. The judge and the dissent conclude that absent
such ongoing negotiations, the Respondent’s actions
were not taken to force concessions in other areas but
rather simply to engage in “pure retaliation” for the Unions’ prior bargaining positions. We disagree.
We find that the absence of ongoing bargaining is not
outcome determinative. The parties’ bargaining relationship is a continuing affair; it does not cease during the
term of an agreement. We also disagree with the dissent’s assertion that the lack of active bargaining proves
that the Respondent did not intend to use the issue as a
bargaining chip in future negotiations. Indeed, it would
be reasonable for the Respondent to conclude that its
decision here might well prompt the Unions to be more
openminded to proposed concessionary midterm modifications in the future than it had been in the past.11
ing strategy. Thus, this was not a new justification offered for the first
time at the hearing.
11 We also reject the judge’s finding that the Respondent violated
Sec. 8(a)(1) when Plant Manager Killen told employee Ed Vallo, the
local union president at Riverside, that the reason for the denial of the
Appreciation Day was the Union’s prior refusal to entertain midterm
contract modifications. A statement violates the Act if it has “a reasonable tendency to coerce employees in their choice whether to engage in
union activity.” Real Foods Co., 350 NLRB 309, 309 fn. 4 (2007).
Contrary to our dissenting colleague, we find that Killen’s statement
was a lawful explanation of the Respondent’s reasons for the denial of
the benefit and would not have a reasonable tendency to coerce employees in their Sec. 7 activity. Our disagreement with our colleague’s
5
Additionally, we find neither animus nor pretext in the
Respondent’s assertion that granting the Appreciation
Day unilaterally to unit employees would violate the Act.
The parties’ collective-bargaining agreements contained
provisions regarding paid holidays, so it was not unfounded for the Respondent to consider that granting an
additional paid day off to unit employees without notice
or an opportunity to bargain may have violated the Act.
See B.F. Goodrich Co., 195 NLRB at 915 (finding that
“efforts by an employer to extend new benefits to represented employees would usually be in derogation of the
contractually established benefits package. Such unilateral action may, indeed, constitute an unlawful refusal to
bargain.”). Although the Respondent could have offered
to bargain, nothing in Section 8(d) suggests that a party
must bargain over or accept midterm contract changes.12
See Boeing Co., 337 NLRB 758, 762 (2002) (“[I]n the
absence of reopener language, we find Section 8(d) protects every party to a collective-bargaining agreement
from involuntarily incurring any additional bargaining
obligations for the duration of the agreement.”). Thus,
we find that the Respondent’s assertion of its concern
regarding unilateral midterm changes was not evidence
of animus or pretext.
Finally, we find that the District of Columbia Circuit
Court’s rejection of the majority position in Arc Bridges,
362 NLRB 455 (2015), enf. denied 861 F.3d 193 (D.C.
Cir. 2017), further supports dismissal of the complaint.
In that case, the Board had found that the employer violated Section 8(a)(3) and (1) by withholding a pay increase from represented employees, while granting increased pay to unrepresented employees, in the course of
collective bargaining.
362 NLRB 455, 456–458.
Among other reasons for finding animus, the Board rejected the employer’s legitimate business reason for the
view of this case is perhaps best illustrated by our different characterizations of the effect of Killen’s statement on Vallo. We agree with our
colleague that Killen’s statement would tend to influence Vallo’s “decision-making in his representative capacity when next approached by
management seeking midterm concessions.” For our colleague, this
represents a tendency “to interfere with Vallo’s protected activity.” For
us, it constitutes the lawful application of leverage within an ongoing
bargaining relationship. Hence, we reverse the judge’s finding of a
violation.
12 The dissent asserts that the Respondent’s decision to grant paid
holidays on three prior occasions—after first seeking the Union’s consent—undermines the Respondent’s argument that unilaterally granting
the mid-term benefit would violate the Act. The fact that the Respondent has awarded a holiday to employees three times in the past 20 years
does not mean that it was obligated to do so here. Nor does the Respondent’s prior award of benefits undercut its statement that such
unilateral action violates the Act. Although the unions wrote a letter
consenting to such an award as a collective group, the Respondent
exercised its right to address any increased benefits individually at
future bargaining.
6
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
raise (i.e., the employer’s attempt to avoid a strike and
prevent further employee attrition). Id. at 458–459. The
court disagreed with the Board’s finding of animus, noting that “[t]he Board failed adequately to explain why
these two justifications, which are respectively a facially
reasonable bargaining strategy and a rational business
decision, are indicative of antiunion animus.” 861 F.3d
at 197–198. So also here. For the reasons explained
above, the Respondent’s decision to withhold the Appreciation Day benefit from most of its represented employees was a rational business decision and a reasonable
strategy to apply leverage within the context of its ongoing bargaining relationships with the several Unions. In
addition, the record establishes that, with the advent of
Zingales as its executive director of labor relations, the
Respondent had adopted a policy and practice of bargaining with each unit separately and, consistently, of not
granting midterm contract benefits globally to multiple
bargaining units. This, too, was a facially reasonable
bargaining strategy and further supports our finding that
the challenged decision was not motivated by antiunion
animus.13
In sum, we find that the Respondent’s decision not to
grant represented employees the paid holiday was simply
a reflection of the “competing forces and counteracting
pressures” that were a part of the historical collectivebargaining relationship. Sun Transport, 340 NLRB at
72. In these circumstances, and in the absence of evidence of any bad faith on the Respondent’s part, we find
that the General Counsel failed to meet its initial burden
under Wright Line, and thus he did not meet his burden
to establish that the Respondent violated the Act.
13 We disagree with the dissent’s attempt to distinguish the court’s
reversal of Arc Bridges on the grounds that (1) the relevant events in
that case occurred during ongoing bargaining; and (2) the court accepted that the employer’s denial of the wage increase was based on increased employer costs as a result of bargaining difficulties, rather than
antiunion animus. While it is true that the parties were engaged in
active negotiations in Arc Bridges, for the reasons stated above, we do
not find the absence of ongoing negotiations here outcome determinative. Moreover, similar to the court’s holding in Arc Bridges, we find
that the Respondent’s statement linking the Union’s prior refusal to
consider midterm contract modifications to the Union’s refusal to grant
the paid holiday was merely an “accurate statement” reflecting the
Respondent’s bargaining strategy and not evidence of animus. See id.
at 197 (employer’s representation that it would keep giving pay raises
“until the Union was voted in” was lawful as an “accurate statement” of
bargaining strategy). See also Orval Kent Food Co., 278 NLRB 402,
403 (1986) (declining to infer an unlawful motivation from a manager’s
remark attributing a decision not to give wage increases to the union’s
certification because such “remarks were merely a realistic statement of
the effects of the bargaining obligation which the [Employer] incurred
when the Union was certified to represent the ... employees”).
For the above reasons, we shall order that the complaint be dismissed in its entirety.
ORDER
The complaint is dismissed.
Dated, Washington, D.C. May 7, 2019
______________________________________
John F. Ring,
Chairman
________________________________________
William J. Emanuel
Member
(SEAL)
NATIONAL LABOR RELATIONS BOARD
MEMBER MCFERRAN, dissenting.
This is a straightforward case of employer discrimination against union-represented employees because of
what their unions had legitimately refused to do: modify
existing collective-bargaining agreements at the employer’s request. The Respondent had recently enjoyed exceptional profits and decided to thank its workforce by
granting an extra paid day off from work—an “appreciation day.” The Respondent decided not to grant the “appreciation day” to all its employees, however. It denied
this benefit to most of its union-represented employees,
specifically because their unions had not acquiesced in
the Respondent’s past requests for mid-term collectivebargaining agreement modifications. This reason was
conveyed by one of the Respondent’s plant managers to
a local union president. The judge here correctly found:
(1) that the Respondent’s denial of the “appreciation
day” to its union-represented employees “represents
straightforward punishment of union[-represented] employees in retaliation for past protected activity under the
[National Labor Relations] Act”; and (2) that the plant
manager’s statement revealing the Respondent’s rationale for its decision independently violated the Act.
The Board should affirm these well-supported findings.
I.
The undisputed facts are as follows. On July 28,
2015,1 in a town hall video meeting for the entire company, the Respondent’s CEO Ken Frazier announced the
company’s decision to grant the “appreciation day” to its
employees. The slide show accompanying the an1
All dates are in 2015.
7
MERCK, SHARP & DOHME CORP.
nouncement, however, stated that the appreciation day
did not apply to “those in US who are covered by a collective bargaining agreement.”
The same day as the announcement, the Respondent
for the first time informed its human resource managers
that union-represented employees were excluded because
the benefit was not in the applicable collectivebargaining agreements and “we can’t unilaterally give
the day.” When Riverside Plant Manager Brian Killen
questioned Executive Director of U.S. Labor Relations
Tony Zingales about this exclusion, Zingales explained
that the refusal to include most union-represented employees was because the Unions had refused to agree to
minor midterm contract modifications in the past few
years.2 According to Killen, Zingales informed him that
in the previous couple of years the Respondent had made
changes affecting its nonunion employees, including
changes related to payroll, 401(k) retirement benefits,
and year-end holidays, but that the Unions had refused to
cooperate in agreeing to these “minor changes.” Accordingly, as Killen recounted Zingales saying, “Merck was
not inclined to approach the union in offering the appreciation day” or to “just give it to the unions.”
Soon thereafter, Killen met with Ed Vallo, president
of the Riverside local union, and repeated to Vallo the
Respondent’s rationale for denying the “appreciation
day” to union-represented employees.
In response to the Respondent’s actions, several local
union presidents wrote a joint letter to CEO Frazier, referencing prior instances in which the Respondent had
included union-represented employees in company-wide
benefits, and requesting that unit employees receive the
“appreciation day” benefit. The letter also offered assurances that no grievances would be filed if employees
were to receive the day off. The Respondent did not answer this letter, but CEO Frazier emailed West Point,
New Jersey local union president Daniel Bangert, asserting that “constraints on implementing unilateral changes”
prevented the Respondent from granting the “appreciation day” to union-represented employees. At the time of
these events, no collective-bargaining negotiations were
underway, and in fact no relevant labor agreement was
due to expire for at least another year.
As planned, on September 4 the Respondent’s entire
nonunion workforce enjoyed a paid day off from work
while most of its union-represented employees reported
for work as usual.
2 Represented employees at the Respondent’s Kenilworth, New Jersey facility received the “appreciation day” because their local contract
included a provision entitling them to receive the same benefits as their
nonunion counterparts.
II.
On these undisputed facts, the judge properly found
that the Respondent violated Section 8(a)(3) and (1) of
the Act by discriminatorily denying union-represented
employees the “appreciation day,” and independently
violated Section 8(a)(1) when Riverside Plant Manager
Killen informed Local Union President Vallo of the reason why.
A.
An employer may treat represented and unrepresented
employees differently when providing new benefits, so
long as the disparate treatment is not unlawfully motivated.3 As the majority acknowledges, the Board assesses
motivation in cases like this one using the familiar
Wright Line4 analytical framework. But the majority’s
conclusion that the General Counsel failed to demonstrate unlawful motivation under that framework is plainly mistaken.
The Union’s prior refusals to agree to midterm contract modifications was conduct that is protected under
the Act. See R.E.C. Corp., 296 NLRB 1293, 1293
(1989) (employer violated Act by laying off employees
because they refused to agree to midterm contract modifications). It follows that the Respondent’s admission
that the “appreciation day” was not given to most unionrepresented employees because of that protected conduct
constitutes direct evidence of the Respondent’s retaliatory motive—and no additional evidence of unlawful motivation is required. Cf. Webco Industries, 337 NLRB
361, 364 fn.10 (2001) (noting that “on those rare occasions when an employer states forthrightly that he fired
an employee because of his protected conduct, the Board
does not look further for retaliatory motive, because the
motive has been admitted.”). Simply put, although the
Respondent previously had granted union-represented
employees benefits that were being extended companywide, on this occasion the Respondent denied unionrepresented employees the “appreciation day” because
3
Shell Oil Co., 77 NLRB 1306, 1310 (1948); see also Sun
Transport, Inc., 340 NLRB 70, 72–73 (2003); Empire Pacific Industries, 257 NLRB 1425, 1426 (1981); B.F. Goodrich Co., 195 NLRB
914, 914-915 (1972).
4 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert.
denied 455 U.S. 989 (1982). Under Wright Line, the General Counsel’s
initial burden is to show that protected activity was a motivating factor
in the employer’s adverse action. Specifically, the General Counsel
must show (1) union or protected activity, (2) employer knowledge of
that activity, and (3) union animus on the part of the employer. If the
General Counsel makes that showing, the burden then shifts to the
employer to show that it would have taken the same action even absent
the employees’ protected activity. Wright Line, supra, at 1089.
8
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the Unions had rebuffed its proposed mid-term contract
modifications.
B.
The majority’s reasons for finding that the General
Counsel failed to demonstrate that the Respondent’s decision was unlawfully motivated cannot withstand scrutiny. The majority first posits that the Respondent’s reliance on the Unions’ past resistance to mid-term contract
changes merely reflected the “competing forces and
counteracting pressures inherent in the collective bargaining process.” Second, the majority finds merit in the
Respondent’s further rationale that its decision not to
grant the benefit was borne out of fear of committing an
unlawful unilateral change. There is no merit to either
rationale.
1.
The majority draws its “collective bargaining process”
rationale from Sun Transport, supra and the District of
Columbia Circuit’s decision in Arc Bridges.5 As explained by the judge, Sun Transport and Arc Bridges
presented materially different circumstances.
In Sun Transport, the Board declined to find a Section
8(a)(3) violation where the respondent denied unionrepresented employees the same severance pay it granted
to unrepresented employees—amid active bargaining for
a new contract. 340 NLRB at 72—73. The majority
necessarily concedes that “in the spring of 2015 [when
the announcement was made], Merck was not actively
engaged in bargaining with any of the units.”6 In contrast to the Sun Transport situation, then, the Respondent’s exclusion of union-represented employees from the
company-wide “appreciation day” was not “intertwined”
with ongoing bargaining where the Respondent was attempting to “force concessions in other areas.” Id. at 72.
To the contrary, the record shows that the Respondent
had just negotiated a new collective-bargaining agreement with the local union at its Rahway, New Jersey
facility, which was effective May 1, 2015, through April
5 Arc Bridges, Inc. v. NLRB, 861 F.3d 193 (D.C. Cir. 2017), denying
enforcement to 362 NLRB 455 (2015).
6 At the hearing, the Respondent’s labor relations official Zingales
asserted for the first time that the decision was part of a supposed “bargaining strategy” at Rahway, Elkton, and West Point—despite conceding that he did not mention “bargaining strategy” when recommending
the exclusion to the Respondent’s top managers and despite plant manager Killen’s uncontroverted testimony that Zingales did not mention
“bargaining strategy” when explaining the exclusion to plant managers.
The Board generally finds, such “post-hoc” justifications pretextual, as
the judge properly did here. See, e.g., Approved Electric Corp., 356
NLRB 238, 239 (2010) (“[t]he Board commonly recognizes such shifting rationales as evidence that an employer’s proffered reasons for
discharging an employee are pretextual.”) (citing City Stationery, Inc.,
340 NLRB 523, 526 (2003).
2023, so that bargaining for Rahway was almost 8 years
away from the time of the announcement. Similarly, at
the Elkton, Virginia plant, the parties had concluded an
agreement in 2014 that was effective through April 30,
2018, almost 3 years after the “appreciation day.” And
the contract covering unit employees at the West Point,
New Jersey facility was not set to expire until the end of
April 2016, giving the parties almost a year before bargaining began. Thus, as the judge found, the Respondent
“in a very real sense. . . consciously refused to use appreciation day as a bargaining chip with the unions.” (emphasis in original). It neither sought nor gained any leverage from its refusal to provide the “appreciation day”
benefit to union-represented employees, but rather acted
in “pure retaliation” for the Unions’ prior protected conduct.
In Arc Bridges the Board found that the employer had
violated Section 8(a)(3) by failing to give the same wage
increase to union-represented employees that it gave to
unrepresented employees. The District of Columbia Circuit disagreed, but, as in Sun Transport, based on circumstances not present here. The court found that the
employer’s refusal to grant the same wage increase to
union-represented employees occurred in the context of
ongoing negotiations, in which the union had requested
substantially more than the employer was willing to give
to unrepresented employees. In addition, the court accepted that the employer’s reason for not giving the wage
increase to union-represented employees was “increased
costs,” not the employees’ Section 7 activity. Arc Bridges, above, 861 F.3d at 197.
Again, the parties in the present case were not engaged
in active negotiations, and, as stated, the Respondent
itself never articulated a “bargaining strategy” rationale.
Instead, as the judge found, the Respondent’s stated reasons were either pretextual or evidenced direct retaliation
for protected activity.7
7 The majority’s attempt to rehabilitate Zingales’ August 3 statements that “Merck was not inclined to approach the union in offering
the appreciation day” or to “just give it to the unions” as “evidence of a
contemporaneous reference to its bargaining strategy” is wholly unpersuasive. Those statements immediately followed Zingales’ complaint
to Killen that the Union had refused to acquiesce in the Respondent’s
past attempts to modify the collective-bargaining agreement, directly
confirming the Respondent’s retaliatory intent.
Nor is there any merit to the majority’s reliance on the notion that
the parties have an “ongoing bargaining relationship” and thus are
essentially always in a state of active negotiations. Accepting this
premise would open the door to employers asserting a similar “bargaining strategy” rationale whenever they wished to shield otherwise retaliatory action.
MERCK, SHARP & DOHME CORP.
2.
The majority’s reliance on the Respondent’s claimed
fear of committing an unlawful unilateral change is also
unwarranted. This claimed fear is contradicted by the
Respondent’s own written statements when it announced
the “appreciation day,” as well as by its own past conduct in similar situations. In its announcement notice,
the Respondent represented that the benefit “applies
globally where business operations and local practices/laws permit, and, as required, subject to consultation
with employee representatives or works councils” (emphasis added). Thus, the Respondent knew exactly how
to grant unit employees the “appreciation day” without
violating the Act. Moreover, as described, on August 21
several local union presidents wrote a letter to CEO Frazier affirmatively requesting unit employees’ inclusion in
the benefit, which plainly should have allayed the Respondent’s asserted fears of being charged with unlawful
unilateral action. Relatedly, if the Respondent still harbored any lingering doubts about the Unions’ potential
reactions, those doubts surely should have been laid to
rest by the Unions’ assurances that no grievances would
be filed if the “appreciation day” were extended to unit
employees.8
Further, the Respondent’s asserted fear of violating the
Act is completely at odds with its past actions in similar
circumstances. As the majority acknowledges, the Respondent had on three previous occasions granted unionrepresented employees a paid-day off from work, along
with nonunion employees, after consulting with the Unions: on January 2, 1998, on Martin Luther King Day in
2006, and on January 2, 2009. These examples further
highlight the pretextual nature of the Respondent’s “fear
of violation” rationale, and they simultaneously bolster
the General Counsel’s showing that the Respondent’s
denial of the “appreciation day” to union-represented
employees was unlawfully motivated.9
C.
Finally, independent of the 8(a)(3) and (1) violation,
Plant Manager Killen’s statements revealing the retalia8 The majority points out that the Respondent was not required to
propose the “appreciation day” to the Unions, and I do not claim otherwise. But the question presented is why the Respondent chose not to.
The pretextual reasons it asserts speaks to its unlawful motivation.
9 See Approved Electric Corp., 356 NLRB at 240 (“evidence that
[an] employer’s purported reasons for [an] action were pretextual—that
is, either false or not in fact relied upon”–supports a finding that the
action at issue was discriminatorily motivated). The judge correctly
found that the General Counsel carried his initial Wright Line burden,
and was also correct, for the reasons stated in his decision, that the
Respondent did not meet its rebuttal burden under Wright Line.
9
tory motive behind the Respondent’s decision “would
reasonably tend to interfere with, threaten or coerce employees in the exercise of their rights under Section 7 of
the Act.” Waste Stream Management, 315 NLRB 1099,
1100 (1994). The test is an objective one, and in evaluating the remarks the Board does not consider the motivation behind them or their actual effect. Miller Electric
Pump & Plumbing, 334 NLRB 824, 825 (2001); Joy Recovery Technology Corp., 320 NLRB 356, 365 (1995),
enfd. 134 F.3d 1307 (7th Cir. 1998). The majority asserts that because the Respondent’s motive was lawful,
Killen’s statement cannot be unlawful. I disagree with
the majority’s premise, of course. But in any case, the
coercive tendency of Killen’s statement must be considered separately. That depends on what Killen said and
not on the Respondent’s actual motive in taking the action Killen referred to. I know of no case, and my colleagues cite none, where an independent 8(a)(1) statement falls away, as my colleagues suggest, because an
unlawful motive has not been ascribed to the conduct
supporting the 8(a)(3) violation. Intentions aside,
Killen’s statements would have a reasonable tendency to
interfere with Vallo’s protected activity, specifically,
Vallo’s decision-making in his representative capacity
when next approached by management seeking midterm
concessions.10
III.
Nothing in the Act required the Respondent to treat its
union-represented and its unrepresented employees identically, but it was not free to treat them differently in order to punish represented employees for the statutorilyprotected actions of their Unions. That is plainly what
happened here. The majority errs in excusing the Respondent’s reprisal and its unlawful statement revealing
its unlawful motive. Accordingly, I dissent.
Dated, Washington, D.C. May 7, 2019
______________________________________
Lauren McFerran,
Member
10 My colleagues state that “[their] disagreement with [my] view of
this case is perhaps best illustrated by our different characterizations of
the effect of Killen’s statement on Vallo.” Although they agree that
Killen’s statement would tend to influence Vallo’s decision-making in
his representative capacity, they reject the judge’s common-sense conclusion that this impermissibly interfered with Vallo’s protected activity. My colleagues instead dismiss Killen’s statement as conveying no
more than “the lawful application of leverage within an ongoing bargaining relationship.” But for reasons explained, this spin on the “bargaining strategy” rationale must fail because the parties were not engaged in negotiations at the time.
10
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
NATIONAL LABOR RELATIONS BOARD
David L. Shepley, Esq., for the General Counsel.
Mark J. Foley, Esq. (Drinker, Biddle & Reath, LLP), of Philadelphia, Pennsylvania, for the Respondent.
Jonathan Walters, Esq. (Markowitz & Richman), of Philadelphia, Pennsylvania, for the Charging Parties
DECISION
DAVID I. GOLDMAN, Administrative Law Judge. This case
involves a pharmaceutical manufacturer that employs approximately 67,000 people worldwide, with roughly 23,000 employed in the United States. Of these U.S. employees approximately 2700 are union-represented and covered by collectivelybargained agreements.
In late July 2015, at a “global town hall” video meeting for
employees, the employer’s CEO announced that in appreciation
for their work and the company’s performance employees
worldwide would receive an “appreciation day”—a paid day
off on September 4, 2015. The day off was for employees
worldwide, with one exception: the employer stated that the
paid day off “[d]oes not apply to those in U.S. who are covered
by [a] collective bargaining agreement.”
The announcement was not well-received by U.S. unionrepresented employees. Local union officials appealed to the
employer to include the union employees in appreciation day.
The employer refused and on September 4 the paid day off was
provided to most employees worldwide except for U.S. unionrepresented employees (with an exception, as described below,
for one group of union employees who were deemed contractually entitled to any benefits given to the nonunion employees at
their plant).
The government alleges that the refusal to provide the unionrepresented employees the appreciation day was unlawfully
motivated and in violation of Section 8(a)(3) and (1) of the
National Labor Relations Act (Act). I agree, based on several
factors, the chief one being the admission, mooted at trial and
attributed to the manager who recommended the union employees’ exclusion, that the exclusion was in retaliation for the unions’ past refusal to entertain midterm contractual changes
sought by the employer. Contrary to the contentions of the
employer, I find that this motive represents straightforward
punishment of union employees in retaliation for past protected
activity under the Act. I also find that a plant manager’s admitted statement to one of the union presidents that this unlawful
motive was the rationale for excluding union employees constitutes unlawful coercion, an independent violation of Section
8(a)(1) of the Act.
STATEMENT OF THE CASE
On November 9, 2015, Local 10–580 of the United Steel,
Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL–CIO, CLC (Local 10–580) filed
an unfair labor practice charge alleging violations of the Act by
Merck, Sharp & Dohme Corp. (Merck). Region 6 of the Na-
tional Labor Relations Board (Board) docketed this charge as
Case 06–CA–163815. Local 10-580 filed an amended charge
in the case on December 28, 2015, a second amended charge on
January 29, 2016, and a third amended charge on March 10,
2016.
On January 27, 2016, Local 94C, the International Chemical
Workers Council of the United Food and Commercial Workers
International Union, AFL–CIO (Local 94C) filed an unfair
labor practice charge against Merck alleging violations of the
Act, docketed by Region 5 of the Board as Case 05–CA–
168541. Local 94C filed an amended charge on February 9,
2016, and a second amended charge on March 10, 2016.
On January 25, 2016, Local 4–575 of the United Steel, Paper
and Forestry, Rubber, Manufacturing, Energy, Allied Industrial
and Service Workers International Union, AFL–CIO, CLC
(Local 4–575) filed an unfair labor practice charge against
Merck docketed by Region 22 of the Board as Case 22–CA–
168483. A first amended charge was filed in the case on February 22, 2016, and a second amended charge filed March 10,
2016.
Based on an investigation into these unfair labor practice
cases, on June 30, 2016, the Board’s General Counsel, by the
Regional Director for Region 6 of the Board, issued an order
consolidating these cases, and a consolidated complaint and
notice of hearing alleging that Merck had violated the Act. On
July 27, 2016, Merck filed an answer denying all alleged violations of the Act. The General Counsel issued an amendment to
the consolidated complaint on September 19, 2016, to which
Merck filed an answer on September 30, 2016.
A trial in these cases was conducted on October 4 and 5,
2016, in Bloomsburg, Pennsylvania. Counsel for the General
Counsel, the Respondent, and the Charging Parties filed posttrial briefs in support of their positions by December 2, 2016.
On the entire record, I make the following findings, conclusions of law, and recommendations.
Jurisdiction
Merck is a corporation with offices and place of business in
Riverside, Pennsylvania, Elkton, Virginia, and Rahway, New
Jersey. Its facilities at these locations have been engaged in the
manufacture and nonretail sale of pharmaceutical products. At
all material times, Merck has been an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7) of
the Act. At all material times, Local 10-580, Local 94C, and
Local 4-575 have been labor organizations within the meaning
of Section 2(5) of the Act. Based on the foregoing, I find that
this dispute affects commerce and that the Board has jurisdiction of this case, pursuant to Section 10(a) of the Act.
UNFAIR LABOR PRACTICES
FINDINGS OF FACT
INTRODUCTION
Merck manufactures and sells pharmaceuticals and employs
approximately 67,000 worldwide. Approximately 23,000 are
employed in the United States. Of those 23,000 employees,
approximately 2700 are union-represented, whose terms and
conditions of employment are covered by collectively-
MERCK, SHARP & DOHME CORP.
bargained agreements.
Merck’s U.S. union-represented employees work in nine
bargaining units, each with their own labor agreement and local
union. The record does not speak with any precision to the
definition of the bargaining units and it is immaterial for the
purposes of these cases. There are two units at the Rahway,
New Jersey facility. One is represented by Charging Party
Local 4-575, the other by Local 68 of the International Union
of Operating Engineers. Charging Party Local 2-0580 represents employees at Merck’s Riverside, Pennsylvania plant (also
called the Danville or the Cherokee plant). The West Point,
New Jersey facility employees are organized into three bargaining units. One is represented by the International Brotherhood
of Teamsters, Local 107, one by Charging Party 10-0086, and
one by the Office and Professional Employees International
Union, Local 1937. There are two bargaining units at the
Elkton, Virginia plant, one represented by Charging Party Local 94, and the other by Workers United, Local 1398. District
15, Lodge 315 of the International Association of Machinists
represents a bargaining unit at the Kenilworth, New Jersey
facility.
The origins of appreciation day
On September 4, 2015, Merck provided a paid “appreciation
day” off for most of its workforce both in the U.S. and worldwide. Union-represented U.S. employees did not receive this
extra day off. The exception was the Kenilworth, New Jersey
facility unit employees because Merck determined that Kenilworth’s bargaining agreement mandated that the unit employees receive benefits received by nonunit employees at the plant.
The origins of the September 4 appreciation day were described in testimony provided by Jeff Zeller, Merck’s vicepresident of global compensation and benefits. Zeller testified
that in the spring of 2015, his manager, who was the chief HR
officer for Merck, approached Zeller and asked him to think
about some ideas for Merck to show appreciation to Merck
employees “for the strong business results that we were seeing
so far that year in 2015.” After consultation with his HR management team, and with colleagues outside the U.S., Zeller
determined that an extra paid day off would be “the right signal
to our employees.” Zeller forwarded the proposal to his manager and ultimately the decision to move forward was made by
CEO Ken Frazier. According to Zeller, shortly after the July 4
holiday the decision was made by Merck to move forward with
a paid day off on September 4, 2015, the Friday before the
Labor Day holiday in the United States.
The exclusion from appreciation day of the U.S. unionrepresented employees was prompted by the advice and direction to Zeller of (then) Executive Director of U.S. Labor Relations Tony Zingales. Zeller testified that he “relied solely on
[Zingales’] judgment as it relates to employees covered under
the collective-bargaining agreement.” According to Zeller,
Zingales’ “take” was that “you can’t do this unilaterally” and
““it should not apply to those under collective bargaining
agreement.” Zeller testified that “Tony [Zingales] explained to
me that employees in the U.S. are covered by a collective bargaining agreement, and you can’t unilaterally provide an automatic day.” Zeller testified that he and the rest of the company
11
took Zingales’ guidance and advice on this. Zingales did not
tell Zeller that the employees should not get the benefit because
of labor relations issues. He did not tell Zeller that providing
the appreciation day benefit to union-represented employees
would run counter to Zingales’ “bargaining strategy” or “philosophy.”1
The July 28 announcement of appreciation day
Merck periodically conducts “global town hall” business
briefings for its employees, during which, through webcast or
dial-up, or in person, the entire worldwide workforce is provided an update on the company’s performance. The global town
halls are led by Merck CEO Ken Frazier.
A global town hall briefing was conducted July 28, 2015.
Toward the end, Frazier announced that there would be a
worldwide appreciation day on September 4, 2015, in which
operations would cease and employees would have the day as a
paid day off. The slides for Frazier’s presentation, which were
shown in the meeting, stated because “[y]ou and your colleagues give so much time and energy to our company . . . .
[Merck] [w]anted to provide this ‘special’ recognition and
‘thank you’ for great performance we’re seeing at this mid
point of 2015.” (emphasis in original). Another slide highlighting the day off stated around the border of a picture of a globe
of the world: “You give so much of your time . . . We want to
give some back.” (All capitalized in original). Across the middle of the globe in large font it stated, “Thank You.”
The slide indicated that Merck’s operations would be closed
September 4, 2015. However, the slide also indicated that this
global shutdown “Does not apply those in US who are covered
by a collective bargaining agreement.”
An announcement “[f]ollowing up on Ken [Frazier’s] announcement” was sent out later that day July 28. It stated, “Enjoy an additional day off in 2015.” The announcement stated
that “the company is providing you with an additional day off
in recognition of the company’s performance through the midpoint of 2015.” The announcement explained:
Merck and MSD operations will close on Friday, Sept. 4.
Please note the following:
• This applies globally where business operations and local
practices/laws permit, and, as required, subject to consultation
with employee representatives or works councils.
• In countries or sites where Sept. 4 is already a day off or it is
not otherwise possible to close operations on that particular
day, your local managing directors or site leads will select another day and communicate this information to you soon.
• If you have already scheduled Sept. 4 as a vacation day or
your site requires you to work on that day to meet business
1 Zingales testified that he told Zeller that one group of union employees should receive the day off—the unit employees at the Kenilworth facility. Their collective-bargaining agreement contained a
“maintenance of standards provision” that, according to Zingales, “required us to provide benefits to the bargaining unit employees that were
provided to salary employees.”
12
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
needs, please use the additional day off at another time and
coordinate with your manager.
• This additional day off does not apply to those in the U.S.
who are covered by a collective bargaining agreement.
By all evidence, plant managers and employees were not
made aware of the new benefit until July 28, when it was announced during the global town hall. According to Zeller, the
matter was kept “pretty hush within human resources and global communications” in an effort to keep it a surprise for the July
28 briefing.
Employee and Merck responses to the announcement
The announced intention to exclude the union-represented
employees from receipt of appreciation day caused something
of a furor in the unionized plants. There were intimations that
union employees would not cooperate with an upcoming safety
survey and cease participating in voluntary emergency service
groups, which were important for plant operations. Merck’s
intranet comments board received many posts and commentaries from excluded employees and union officials. The local
union president for the West Point plant, Daniel Bangert, wrote
an open letter to CEO Frazier objecting to the exclusion of
union employees.
Frazier, and then Elisabeth Goggin, who is Merck’s global
head of labor relations, responded with email and an intranet
posting, respectively, that stressed and asserted the inability of
Merck to unilaterally provide an extra day off to employees
covered under a collective-bargaining agreement.
On August 21, the local union presidents wrote a joint letter
to CEO Frazier requesting that unit employees be included in
the benefit, expressing concern over the announcement, referencing past instances where company-wide benefits had been
offered to union-represented employees, and disavowing any
suggestion from Merck that the unions would file a grievance
or charge if the unit employees were given the appreciation day
benefit.
Riverside Plant Manager Killen learns why Merck excluded
union-represented employees
The July 28 announcement prompted Riverside Plant Manager Brian Killen to request a conference call with Zingales and
the HR department. Killen testified that in a conference call
with the other excluded plant managers and Zingales and his
HR group on August 3, Killen and other managers asked why
their plants were excluded and whether there was an intention
to negotiate with the unions about it.
Zingales told them that the benefit is not in the labor contracts “and we can’t unilaterally give the day.” Killen knew
that answer was inadequate. As he testified, “clearly I knew
that wouldn’t be a sufficient response for my own information
and I needed more information to go back to the site.” Killen
asked whether Merck was going “to have some kind of bargaining or what is our path forward.” When told no, that “there was
no intent to bargain further,” Killen “and other plant managers
asked about the reason.” The “feedback that we got was that . .
. in the previous couple of years that the company had made
changes to the non-CBA employees . . ., relatively simple
changes” such as “how they administer payroll and 401(k) and
how they complete year end holidays.” Zingales explained to
Killen and the managers that these changes were made for nonunion employees but when “they tried to discuss them with the
union outside of contract negotiations . . . the fee[dback] from
the union was . . . wait until contract negotiations.” Killen
agreed that Zingales told him that the union’s refusal to cooperate in agreeing to these “minor changes” in recent years was the
reason that “Merck was not inclined to approach the union in
offering the appreciation day” or to “just give it to the unions.”
I note that while Killen was, and was known to be, in disagreement with Merck’s decision to exclude the unionrepresented employees—particularly those under his supervision—Killen was and is an agent of and aligned with the Respondent. This only adds to the credibility of Killen’s account
of Zingales’ stated explanation for the motive for refusing to
offer appreciation day to the union-represented employees.
Moreover, Killen’s account is indirectly corroborated by Zingales, who, in his testimony about appreciation day, made the
point—without directly adopting it as a motive for excluding
union employees—that there were “changes in benefits levels
or administrative cha[n]ges or practices that were applied to
non-union employees or salary employees that didn’t apply to
the unionized groups with the exception of the Kenilworth
unit.” He referenced the issue in a manner suggestive of the
belief that if the unions didn’t have to take the bad they are not
entitled to the good, a plausible, but, as discussed below, unacceptable motivation under the circumstances.
Thus, the motives for excluding union employees that Zingales shared with Killen and the plant managers was (1) that it
would be illegal to unilaterally provide these employees with
appreciation day and (2) that he was not going to offer it to
them through the unions in retaliation for the unions’ past unwillingness to make “minor changes” requested of them by
Merck. As an evidentiary matter, Killen’s account of Zingales’
comments is an admission and I credit it. Apart from his status
as a witness for and aligned with the Respondent, I found
Killen to be a highly credible witness, both in his demeanor and
his forthright and plausible account of events, and I credit his
testimony for that reason as well.2
The local union officials’ allegations
In my view, Killen’s credibility extends to his account of his
conversations with Riverside union officials about appreciation
day. Killen testified that he told Riverside local union president
Ed Vallo the substance of Zingales’ remarks as to the appreciation day: i.e., that Merck’s position was that the benefit could
not unilaterally be provided to union employees and that Merck
did not intend to discuss it because of the unions’ previous
refusal to discuss payroll administration, 401(k) administration,
2 I note that there was no objection to this testimony. To the contrary, the Respondent adopts it on brief. See. R. Br. at 13-14. In any
event, pursuant to Federal Rules of Evidence 805 and 801(d)(2)(D),
neither Zingales’ statement to Killen nor Killen’s’ recounting of it to
Vallo (or on the witness stand, for that matter) constitutes hearsay.
Both Zingales and Killen were admitted agents of the Respondent and
acting in the scope of their employment when the statements were
made. See, United States v. Gibson, 409 F.3d 325, 337 (6th Cir. 2005).
MERCK, SHARP & DOHME CORP.
and year-end holiday changes that Merck had sought to change
mid-contract.
Moreover, Killen convincingly denied union president Vallo’s and Union Steward James Little’s contention that in a
meeting within “a few days after the announcement” Killen told
them that Merck refused to include the union plants in appreciation day because “there were serious labor issues at other
sites,” particularly safety issues, and that it was “despicable”
what was going on at the Rahway site—referring to unspecified
labor issues—given that “they had just finished up contract
negotiations” and that “Merck was not “going to reward bad
behavior.”3
Vallo and Little testified that this conversation occurred at
the old plant manager’s office in building 117, and that HR
representative Janelle Patton was present. Patton denied attending a meeting with Vallo and/or Little about issues around appreciation day until late September, weeks after the early August discussion referenced by Little. While Vallo and Little
both testified that Patton’s usual practice was to take notes at
the meetings she attended with them and Killen, no notes of
this meeting were produced.4
This is not a particularly easy credibility resolution, as Vallo
and Little appeared to me to be testifying honestly. I believe
that in their many “free flowing” (as Little and Killen both
described their) conversations in the days and months after the
appreciation day announcement, there was discussion of many
issues, including problems at other plants. However, Vallo and
Little were vague and uncertain on many details, and on the
time frame of the meeting in which the statement was allegedly
made that Rahway and West Point’s issues were the reasons for
exclusion of all union-represented employees from appreciation
day.5 There was also confusion about the dates and timeline for
Vallo/Little’s discussions with Killen about a proposal for sevContrary to the arguments of the counsel for the General Counsel,
I found Killen convincing in both demeanor and with regard to his
recollection. Contrary to counsel for the General Counsel, I found the
instances where Killen could not recall something, for instance, a location of a meeting or whether HR representative Patten was present at a
particular meeting, to be honest attempts to answer. By all evidence,
there were many meetings, formal and informal, attended by some
combination of Patten, Killen, Vallo, and Little. I note that contrary to
the claim of the counsel for the General Counsel on brief, Killen was
not unsure and did not profess lack of recollection as to whether he told
Vallo and/or Little that labor issues at other sites, regarding safety, and
particularly at Rahway, motivated Merck to exclude union employees
from appreciation day. Rather, he (convincingly, to my mind) denied
this.
4 Contrary to counsel for the General Counsel, I did not find Patton’s testimony suspect. She testified that, as an HR representative, she
would prefer to be involved with all discussions with the union representatives, but that Killen, as plant manager, did not involve her in
every meeting he had with Vallo. In particular, while she almost always attended the recurring weekly meetings Killen conducted with
Vallo, she was seldom part of the frequent “ad hoc” meetings that
Killen held with Vallo. In my view, this appeared to be part of the
normal push/pull between HR and plant operations—not an effort to
hide her presence at meetings from the tribunal.
5 Vallo testified that at Rahway there were “ongoing” “labor issues
that came up after negotiations that were impacting the site,” but asked
if he had any specifics he said “not really.”
3
13
en hours of leave that appears to have been conducted in September or even October, not in August as suggested by Vallo.
In the face of the convincing denials by Killen and Patten, I do
not credit Vallo and Little’s claim that Killen told them that
these issues were the reason that all union-represented employees were excluded from the appreciation day.6
Merck carries through with its plan to exclude unionrepresented employees from appreciation day
Between August 3 and 20, Killen spoke with Vallo and Little
and they discussed whether some kind of recognition of plant
employees could be made in lieu of appreciation day. During
this period, Killen testified that while Zingales and his office
had ruled out agreeing to give the union employees the appreciation day holiday, they had not ruled out specific site-by-site
adjustments that could be made at plant managers’ request.
Discussions with Vallo, often accompanied by Little, were
undertaken by Killen at his (and Vallo and Little’s) initiative in
this regard, but nothing was agreed to by upper management.
By August 20, Killen was informed by his immediate boss, Dan
Hoey, that senior level Merck management had determined that
“there would be no further discussions on appreciation day in
terms of potential to bargain for it locally or change directions.”
This was confirmed to Killen the next day in a conference call
with plant managers and Zingales and with Zingales’ immediate boss Elisabeth Goggin. On this call it was stated that the
issue was closed, “[t]here’s no intent to bargain further.” However, Killen was reminded during this call, by Goggin, that as
plant managers, Merck provided them with “authority to recognize people for a job well done at our own sites.” With this
authority, Killen continued to pursue discussions with Vallo
about some kind of recognition for Riverside employees, but
6 I note further the lack of support for the truth of the claim Vallo
and Little attributed to Killen. It weighs against the conclusion that it
was said. There was extensive testimony about recent contract negotiations at Rahway, conflicting views of the application of a new overtime
provision, grievance filing activity, and the union’s concern over the
steady erosion of the bargaining unit over many years. All of these are
serious issues, but none that seems obvious as a basis for retaliation by
Merck against the unions generally. Moreover, the contention that
Killen attributed Merck’s decision to any of these issues, or safety
concerns, or ongoing “bad behavior” at Rahway and West Point, is
undermined by the lack of evidence that Killen had direct knowledge of
any of this. Based on his testimony, the bulk of his information about
other plants’ relationships with Merck came from Vallo, not from
Merck. There is just no evidence, other than the alleged comments
attributed to Killen, that these were the source of the appreciation day
exclusion, much less that Merck officials told Killen this. As to
Killen’s version of what he testified that he told Vallo—that unionrepresented employees were not going to be offered appreciation day
because of past union refusals to entertain midterm contract changes—
this was alluded to by Zingales in his testimony, thus, providing corroboration. Moreover, as noted earlier, Killen’s testimony of what
Zingales told him constitutes an admission from Zingales. Thus,
Killen’s testimony provides direct evidence of what he was told by
Merck about why union employees were denied the appreciation day
off. I believe he was told that and this makes it plausible that he would
convey what he was told and not something there is no evidence that he
knew.
14
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
those discussions were not successful and abandoned in early
October.
Appreciation day occurred as scheduled, on September 4,
2015. In the U.S., the federal holiday of Labor Day was celebrated September 7, creating a 4-day weekend for Merck employees receiving the appreciation day off. Merck’s unionrepresented employees did not receive appreciation day off,
with the exception of the employees in the Kenilworth bargaining unit.
meet or neutralize the General Counsel's showing, can avoid
the finding that it violated the Act by “demonstrat[ing] that the
same action would have taken place in the absence of the protected conduct.” Wright Line, supra at 1089.
ANALYSIS
In the complaint, and at trial, the General Counsel contended
that the Respondent’s motive for refusing to provide appreciation day for union-represented employees, and Killen’s explanation for Merck’s motive for this, revolved around “labor
troubles.” Specifically, it was alleged that Killen told the union
representatives that Merck’s decision was based on safety problems and labor-related activities at Rahway and West Point.
I have found that, contrary to the General Counsel’s claim,
Killen did not tell union representatives Vallo or Little that
labor problems at Rahway or West Point, or safety problems,
were the reason that union-represented employees were excluded from the appreciation day. And I do not find that there is
evidence to support the claim that it was the reason.
Rather, I have found that Zingales, the individual who effectively recommended the exclusion of the union-represented
employees from appreciation day, admitted that Merck’s motive was that it could not provide the benefit unilaterally and
that it would not offer the unions the benefit because in recent
years the unions had refused to accommodate Merck’s midcontract requests for “minor changes” in payroll and 401(k)
administration and holiday issues. Killen also testified that he
told Vallo this.9
This latter admitted motive proves a violation under Wright
Line. Clearly the unions’ refusal to accede to the employer’s
request for midterm changes was protected activity. R.E.C.
Corp., 296 NLRB 1293, 1293 (1989) (“The employees’ conduct in refusing to reopen the contract was clearly protected”;
finding employer violated Act by “laying off employees because they refused to reopen the parties’ collective-bargaining
agreement and agree to midterm modification”). The Respondent obviously knew about it, as Zingales raised it. The credited
evidence shows that Merck refused to offer union employees
the day off because of and in retaliation for the unions’ protected activity of refusing to bargain midterm contractual changes
desired by the Respondent. And, as discussed below, Zingales’
explanation that appreciation day could not be offered unilaterally is not a convincing or accurate explanation for not offering
the benefit.
To be clear, absent an unlawful motivation, there is no requirement that an employer provide represented and unrepresented employees with the same benefits. At the same time,
offering or providing of differing benefits may be a violation of
Section 8(a)(3) and (1) of the Act, if such conduct is motivated
by antiunion considerations.
The General Counsel contends that Merck’s failure to provide appreciation day to the union-represented employees was
unlawfully motivated in violation of Section 8(a)(3) and (1) of
the Act.7 He also contends that Killen’s explanation of the
motive to Vallo independently violated Section 8(a)(1) of the
Act.
I. SECTION 8(A)(3)
A. The Wright Line standard
The Respondent and the General Counsel agree that Wright
Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir.
1981), cert. denied 455 U.S. 989 (1982), provides the appropriate analytical standard for assessing the alleged 8(a)(3) violation.8
Wright Line is the Supreme Court-approved analysis in
8(a)(1) and (3) cases turning on employer motivation. See
NLRB v. Transportation Management Corp., 462 U.S. 393, 395
(1983) (approving Wright Line analysis). In Wright Line, the
Board determined that the General Counsel carries his burden
by persuading by a preponderance of the evidence that union or
other protected conduct was a motivating factor (in whole or in
part) for the employer’s adverse employment action. Proof of
such unlawful motivation can be based on direct evidence or
can be inferred from circumstantial evidence based on the record as a whole. Robert Orr/Sysco Food Services, 343 NLRB
1183, 1184 (2004), enfd. 184 Fed. Appx. 476 (6th Cir. 2006);
Embassy Vacation Resorts, 340 NLRB 846, 848 (2003).
Under the Wright Line framework, as subsequently developed by the Board, the elements required in order for the General Counsel to satisfy his burden to show that protected activity was a motivating factor in an employer’s adverse action are
union or protected activity, employer knowledge of that activity, and union animus on the part of the employer. Adams &
Associates, Inc., 363 NLRB No. 193, slip op. at 6 (2016); Libertyville Toyota, 360 NLRB 1298, 1301 (2014); enfd. 801 F.3d
767 (7th Cir. 2015).
Such showing proves a violation of the Act subject to the following affirmative defense: the employer, even if it fails to
7 Any conduct found to be a violation of Sec. 8(a)(3) would also
discourage employees' Sec. 7 rights, and thus, is also a derivative violation of Sec. 8(a)(1) of the Act. Chinese Daily News, 346 NLRB 906,
934 (2006), enfd. 224 Fed. Appx. 6 (2007).
8 I note that there is no allegation that the Respondent’s refusal to
provide union-represented employees appreciation day was “inherently
destructive of Section 7 rights.” See NLRB v. Great Dane Trailers,
Inc., 388 U.S. 26, 33 (1967). Accordingly, I do not consider the issue.
B. Application of Wright Line
1. The General Counsel’s affirmative case
a. The Respondent’s admitted motive was discriminatory
9 I note that the Respondent admits that Zingales told Killen this
was the rationale for not offering the benefit to employees, and admits
that Killen told this to Vallo. See R. Br. at 13–14.
MERCK, SHARP & DOHME CORP.
Under Shell Oil Co., 77 NLRB 1306, 1310 (1948), and its
progeny, “an employer may, during the course of collectivebargaining negotiations, treat represented and unrepresented
employees differently when providing new benefits, so long as
the disparate treatment is not unlawfully motivated.” Arc
Bridges, Inc., 362 NLRB 455, 456 (2015). For instance, in Sun
Transport Inc., 340 NLRB 70, 72 & fn. 12 (2003), the Board
dismissed an 8(a)(3) allegation based on an employer offering
less severance pay to union-represented employees during collective bargaining than it was offering to unrepresented employees. The Board explained that
the mere fact that different offers are made or that different
benefits are provided does not, standing alone, demonstrate
unlawful motive. Although an employer is not free to discriminatorily afford represented employees less benefits than
unrepresented employees, i.e., in order to discourage support
for the union, the record does not establish that the Respondent engaged in such conduct here. . . . Rather, the Respondent's offer was made in an effort to induce concessions as part
of the give-and-take during negotiations over a comprehensive successor agreement.
See also, B.F. Goodrich Co., 195 NLRB 914, 915 (1972)
(“Thus, in the absence of discriminatory motives in withholding
a benefit from these employees in order to encourage or discourage their membership in or representation by a union, we
find no merit in the General Counsel's contention that Respondent violated Section 8(a)(3) by granting the profit-sharing
benefit only to unrepresented employees”).
The issue then, is whether the Respondent's decision not to
provide the day off to its represented employees (except to
those it felt it contractually required to provide it to) was unlawfully motivated. In other words, was the decision not to
provide appreciation day because of the unions’ past refusal to
accommodate the employer’s midterm demands for changes
retaliation for union activity?
The Respondent, while admitting (R. Br. at 13–14) this as a
“rationale,” calls it part of a “bargaining strategy,” of the kind
permitted by the Board in Sun Transport, supra, and points to
Zingales’ testimony that he did not think it “a good bargaining
strategy to give away [a] holiday.” But the Respondent’s decision and actions manifestly were not a bargaining strategy, at
least not one that the Board legitimates. Indeed, appreciation
day, and the decision not to provide the appreciation day off to
the represented employees, was not made during or as part of
collective bargaining. It was not refused as part of an ongoing
effort “to force concessions in other areas.” Sun Transport,
supra at 72. To the contrary, the decision was made in direct
and admitted retaliation for the union’s past lawful refusal to
bargain midterm changes to the collective-bargaining agreement. In other words, the evidence shows that the employer, by
its own admission, decided to maintain its position of withholding a new benefit that it was providing worldwide to all nonrepresented employees (and even represented employees outside of
the U.S.) in direct response to the unions’ past collectivebargaining strategy of refusing to entertain midterm contractual
changes. (There is, of course, no claim by Merck that union
employees were less deserving of appreciation than other em-
15
ployees in terms of the work performed or job done at Merck.)
To call this a “bargaining strategy” does not avoid the fact
that its motivation is discrimination against the unionrepresented employees for the purpose of penalizing them because of the union’s (lawful) refusal to accept previous and
unrelated employer-offered terms and conditions of employment. Calling it a “bargaining strategy” insulates the conduct
from the proscriptions of the Act no more than would the layoff
of a group of employees in retaliation for their refusal to entertain midterm contractual changes. R.E.C. Corp., 296 NLRB at
1293.
The difference between the Respondent’s motives here, and
the situation where an employer is motivated by a lawful “bargaining strategy,” is plainly demonstrated by comparing the
instant situation to that in Sun Transport, supra—a case relied
upon by the Respondent.
In Sun Transport, in late 1996, the employer began successor
negotiations with its employees’ union for a new labor agreement. In March 1997, the employer decided to divest itself of
the business and thereafter the successor agreement negotiations also encompassed the issue of a severance package. At
the same time, the employer offered to its unrepresented employees a severance package more lucrative than what it was
offering at the bargaining table to the union for the unionized
employees. In April or May 1997, a tentative agreement was
reached on the severance and the successor contract, both of
which were voted down by the union’s membership. Subsequent negotiations focused mostly on severance, as the sale was
underway. The employer refused the union’s offer that the
same severance provided the unrepresented employees be provided. The unit employees again rejected a tentative severance
package that was inferior to that provided the unrepresented
employees, and ultimately the union-represented employees
received no severance for their jobs. In a November 1997 letter
to the union, the employer’s vice-president Fretz explained that
in formulating its severance proposal the employer “had considered how responsive the ‘represented group’ had been to the
Respondent’s efforts to contain costs and improve its competitive position,” noting that in the recent negotiations “the parties
had failed to reach agreement on some of the Respondent’s
proposals, and this resulted in continued high, uncompetitive
costs” which was a factor “when we determine whether we are
willing to offer severance packages to a given group of employees, as well as having some impact on our evaluation of the
total additional costs we are willing to sustain.” Sun Transport,
supra at 71.
The administrative law judge in Sun Transport found that the
employer’s position constituted an admission that the Respondent retaliated against the Union for its bargaining positions.
The Board reversed, but did so with reasoning that makes clear
that Merck’s motives here are unlawful.
In Sun Transport, the Board rejected the judge’s conclusion
that the employer had offered less severance pay to represented
employees in retaliation for the union’s bargaining positions,
because the Board found that the employer’s motive for offering less to the union employees was the cost of bargaining positions taken by the union in negotiations. Specifically, the
Board in Sun Transport rested its conclusion on its finding that
16
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the employer attributed its “high, uncompetitive costs” and
“uncompetitive situation” to the union bargaining positions,
and
those high costs, in turn, were a factor considered by the Respondent in formulating its severance proposal. Thus, we
cannot say that the [union’s] bargaining position itself was the
basis for the severance pay offer.
Further, even if the severance pay offer was based upon the
Union's bargaining position during the negotiations for a successor contract, we would still find no violation of the Act.
With respect to this Union, the matter of severance pay arose
during comprehensive bargaining for a new contract. The
Respondent sought concessions in late 1996 and continued to
seek them in 1997. And, in 1997, this bargaining was intertwined with the bargaining over severance pay. The Respondent sought to use the severance pay issue to force concessions in other areas. More particularly, the Respondent, as
it explained in the November 17 Fretz letter, was tying its position on severance to the Union's refusal "during the entire
period" (i.e., during the negotiations in 1996 and 1997 for a
successor collective-bargaining agreement) to make concessions in other areas.
. . . . The Respondent's severance offer was but one element
of the "competing forces and counteracting pressures" inherent in the collective-bargaining process. Consequently, the
Respondent's consideration of the Union's bargaining positions does not demonstrate antiunion animus. [citations omitted.]
Merck’s motive for refusing to provide the appreciation day
off to represented employees does not square with the rationale
that saved the employer in Sun Transport. Unlike in Sun
Transport, here there is no evidence that Merck’s position was
based on “costs” or “uncompetitiveness” that resulted from the
unions’ refusal to grant what Killen described as “minor changes” during the contract term. Thus, directly contrary to the
distinction drawn by the Board in Sun Transport, here, the unions’ position on the midterm changes—not the costs that
Merck incurred because of them—was the basis for failing to
give the appreciation day off. “Thus,” unlike in Sun Transport,
here “we [can] say that the [union’s] bargaining position itself
was the basis for the [employer’s] offer.”
Moreover, the Board’s second rationale in Sun Transport for
finding no violation is also inapposite here. Unlike in Sun
Transport, the failure to include the union-represented employees in appreciation day was not “intertwined” with ongoing
bargaining. Unlike in Sun Transport, Merck was not using the
appreciation day “issue to force concessions in other areas.” To
the contrary, Merck sought and gained nothing from its position
of not providing appreciation day off to the union-represented
employees. In a very real sense, it consciously refused to use
appreciation day as a bargaining chip with the unions. Merck’s
position on appreciation day was not “but one element of the
‘competing forces and counteracting pressures’ inherent in the
collective-bargaining process.” Rather, this was pure retaliation for the unions’ positions taken in the recent past, and bargaining was neither sought nor granted by Merck over appre-
ciation day.
In short, in this case Merck’s motivations bear none of the
indicia relied upon by the Board in Sun Transport to find the
discrimination between represented and nonrepresented employees to be merely a part of a lawful bargaining strategy.
Merck’s admitted and credited motive for not providing unionrepresented employees the appreciation day benefit constitutes
straightforward evidence of discriminatory motive under the
Act.
b. The July 28 announcement effectively blames the employees’
union status for the exclusion from appreciation day
There is, however, more. The July 28 announcement to employees, by itself, adds to the weight of the discriminatory inference. While announcing that appreciation day “applies
globally where” permitted “and, as required, subject to consultation with employee representatives,” the announcement adds
the condition that “[t]his additional day off does not apply to
those in the U.S. who are covered by a collective bargaining
agreement.”
Thus, while appreciation day covers employees, even when
it requires “consultation with employee representatives,” the
only employees who are excluded from receiving the benefit
are (U.S.) employees who are union-represented and covered
by a collective-bargaining agreement. This explanation “essentially encouraged employees to blame” the union and their union status for the failure to receive the benefit and is an independent indicia of discriminatory motive. Arc Bridges, 362
NLRB 455, 457 (finding this to be an indicia of discriminatory
motive).10
c. The Respondent’s unilateral-action rationale is a pretext
The strength of the General Counsel’s Wright Line case is also increased by the transparently pretextual nature of the Respondent’s claim that it did not provide the paid day off to union employees because it would violate the law to do so unilaterally without consulting with the employees’ union.
Zingales testified that it was his belief that it would be a violation of the law to unilaterally provide appreciation day to
employees with a collective-bargaining agreement. He told
Zeller this was the grounds for excluding union-represented
employees from appreciation day. Merck executives Goggin
and Frazier reiterated this after July 28, when they issued
statements trying to calm the anger over the union employees’
exclusion, but reiterating the exclusion of union employees
from the benefit.
However, I reject as meritless, and untrue, the Respondent’s
contention that a motive for failing to provide the appreciation
day to union-represented employees was the belief that it would
violate the Act to do so unilaterally. If that were its motivation
10 I note that although unalleged in this case, “it is settled that it is a
violation of Sec. 8(a)(1) for an employer to tell employees that they
will be losing a benefit because their status as union represented makes
them ineligible for the benefit.” Covanta Energy Corp., 356 NLRB
706, 714 (2011); Niagara Wires, Inc., 240 NLRB 1326, 1327 (1979) (it
is a per se violation of Sec. 8(a)(1) for employer to maintain a pension
plan that by its terms excludes from coverage employees who are ‘subject to the terms of a collective bargaining agreement.”
MERCK, SHARP & DOHME CORP.
for not providing the benefit, it would have offered it to the
unions as a proposal for the unions to consider, and—as the
local union presidents indicated they would—accept. Indeed,
remarkably, in view of Merck’s argument, its July 28 announcement of appreciation day stated that the benefit “applies
globally where business operations and local practices/laws
permit, and, as required, subject to consultation with employee
representatives or works councils.” (Emphasis added.) Thus,
as Merck itself recognized, any concern with granting the benefit unilaterally to union-represented employee would (and easily could) be overcome by “consultation with employee representatives.” As the Board has explained it:
To the extent that the Respondent is arguing that it had to
withhold the increase to avoid violating Sec. 8(a)(5), there is
no merit in that position either. Had the Respondent wanted
to give its represented employees the same 3-percent increase
that it gave the unrepresented employees, it could have simply
asked the Union for permission. If the Union consented, the
Respondent could have granted the increase without violating
Sec. 8(a)(5).
Arc Bridges, 362 NLRB 455, 459 fn. 18 (Board’s emphasis.)
Merck’s argument that the benefit could not be provided unilaterally is a flimsy, unbelievable, and nonresponsive excuse
for its unwillingness to offer the benefit. It is a purported rationale contradicted by its own notice explaining how it will
provide appreciation day in instances where “local practices/laws” require consultation with a union. Thus, Merck’s
“unilateral action” defense does nothing to explain why it maintained that the benefit would not “apply to those in the U.S.
who are covered by a collective bargaining agreement.”
The truth is, its July 28 announcement notwithstanding,
Merck never intended to consult with its U.S. “employee representatives” so that the benefit could be provided to U.S. unionrepresented employees. Killen was told this directly by Zingales on August 3, just days after the announcement, and he
was told why: the unions’ past bargaining position. And on
August 21, Merck conclusively informed its plant managers
that there would be no bargaining over the matter. The purported restriction on the unilateral grant of benefits was not the
reason for the decision not to offer union-represented employees appreciation day. For all these reasons, Zingales’ testimony
that it was the reason is not credible. Notably, as Killen testified, upon hearing this “unilateral action” rationale on August
3, he immediately recognized that “clearly I knew that wouldn’t
be a sufficient response” . . . to go [take] back to the site.” He
knew that dog wouldn’t hunt. And I agree. It begs the question, which is to say it is an obvious pretext.
While I do not reach or adopt the General Counsel’s argument that Merck had what amounted to a past practice of passing on to union-represented employees benefits given to nonrepresented employees, the past instances in the record of offering new benefits to union employees demonstrate that Merck
knew how to provide union employees a new benefit when it
wanted to do so.11
11 Thus, on January 2, 1998, Merck gave represented and unrepresented employees the day off in addition to the scheduled holidays off.
In 2009, Merck again decided to make January 2, a company holiday
17
Merck’s refusal to offer appreciation day to unionrepresented employees had nothing at all to do with and was
not hindered by any alleged belief that it would be unlawful to
provide the benefit unilaterally. The pretextual nature of this
claim, repeated by Zingales, Goggin, and Frazier, adds to the
strength of the General Counsel’s prima facie case of discrimination. El Paso Electric Co., 355 NLRB 428, 428 fn. 3 (2010)
(finding of pretext raises an inference of discriminatory motive
and negates rebuttal argument that it would have taken the
same action in the absence of protected activities); All Pro
Vending, Inc., 350 NLRB 503, 508 (2007); Rood Trucking Co.,
342 NLRB 895, 897–898 (2004), citing Laro Maintenance
Corp. v. NLRB, 56 F.3d 224, 230 (D.C. Cir. 1995) (“When the
employer presents a legitimate basis for its actions which the
factfinder concludes is pretextual . . . . the factfinder may not
only properly infer that there is some other motive, but that the
motive is one that the employer desires to conceal—an unlawful motive . . . .”) (internal quotation omitted).
Accordingly, I find that the General Counsel has more than
met his prima facie case and proven that discriminatory animus
motivated the Respondent’s decision not to provide appreciation day for the union-represented employees.
2. The Respondent’s Wright Line rebuttal
The remaining issue under Wright Line is whether the Respondent has demonstrated that it would have denied unionrepresented employees appreciation day even in the absence of
the protected union conduct that motivated its actions. Under
the circumstances, it is not a serious claim. I have already concluded, for the reasons discussed above, that the Respondent’s
claim that it could not unilaterally provide the benefit was a
pretext. Notably where “the evidence establishes that the proffered reasons for the employer’s action are pretextual—i.e.,
either false or not actually relied upon—the employer fails by
definition to show that it would have taken the same action for
those reasons, regardless of the protected conduct.” David Saxe
Productions, 364 NLRB No. 100, slip op. at 4 (2016); Rood
Trucking, 342 NLRB at 898, quoting Golden State Foods
Corp., 340 NLRB 382, 385 (2003). However, the Respondent
raises some additional arguments that I address below.
a. Bargaining strategy as a defense
Zingales testified that, “in addition” to the unilateral-action
issue, he believed that it was “not consistent with bargaining
strategy” to provide the union-represented employees additionand it reached an agreement with Local 4–575 to include the unionrepresented employees. R. Exh. 6. In 2006, after contract negotiations
had concluded with a multi-union council that bargained as a group
with Merck at that time, Merck decided to make Martin Luther King
Jr.’s birthday a company holiday. The then-director of labor relations,
Glen Guior, called Vallo and said, “Ed, I want you to officially ask me
as the Merck Inter-union council to have a Martin Luther King’s birthday as an additional holiday for all the sites represented by the council.” Vallo at first thought that Merck was not being serious, but, assured he was, Vallo asked and Guior agreed, and the union employees
thereafter received the holiday along with Merck unrepresented employees. I cite these examples, not as evidence of an official past practice, but as evidence that if Merck wanted to provide a benefit to union
employees, it knew how to do so.
18
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
al benefits that were not in their labor agreement. Zingales had
a preference for dealing with the unions at the different Merck
locations individually, and felt that “master bargaining is not in
the best interest of the company and not effective on a locationby-location basis.” In 2014, under Zingales’ leadership, Merck
ended the remnants of multi-union bargaining “master” bargaining—already by that time reduced to two locations from
five or six—and Zingales was resistant to any type of group
bargaining with the unions. Moreover, Zingales explained, “I
don’t think that coming off a significant labor negotiations in
Elkton and then Rahway”—negotiations he described as “long
drawn out” and “difficult,”—and with the West Point contract
expiring in nine months on April 30, “that it was a good bargaining strategy to give away [a] holiday.”
The Respondent suggests that, even absent its unlawful motive, it would not have offered the union employees the day off
because it might smack of the multiunion coordinated bargaining that Zingales opposed and that Merck had moved away
from. This is unconvincing. Merck did not need to engage in
multiunion bargaining in order to offer the unions the day off.
An email or phone call to each union would have sufficed if
Merck was worried that offering the day off en masse would be
misinterpreted as a revival of multiunion bargaining—a concern that, frankly, seems contrived. Appreciation day was to
show appreciation to the employees by providing an unplanned
paid day off. Union-represented employees were left out of
this—not because Merck says they were unappreciated. But
rather, to “pay back” the unions for a lack of cooperation in
recent years. It is highly implausible, and entirely unproven,
that union-represented employees were left out of appreciation
day so that Merck could avoid any implication that it was violating its principles against multi-union bargaining.
Similarly, I reject as untrue the general suggestion of Zingales that his “philosophy” or “bargaining strategy” precluded
any changes for union employees during the term of a contract.
Indeed, we know that Zingales had requested midcontractual
changes from the unions and was unhappy that the unions refused. Thus, it appears that this asserted live-and-die-by-thecontract “strategy” emerged only in response to and in retaliation for the unions’ previous rebuff of Merck’s entreaties. That
would taint it, were it true. However, I do not believe it. Notably, Zingales did not offer this as a contemporary explanation
for Merck’s actions to Killen, to Zeller, or to anyone else, as far
as the record shows. The first time the explanation was offered
was at the hearing in a description by Zingales of his internal
thinking on the matter. This type of unverifiable assertion is
not the most compelling evidence. All the less so because it
appears to be a transparent effort to track cases in which the
Board permits the employer leeway to grant or deny new benefits as part of a “bargaining strategy.” I do not believe it.
The Respondent’s motivation for not providing, for not offering—for not permitting—union-represented employees to
have appreciation day off was because the unions failed to accede to the Respondent’s will and make midterm changes to the
contract requested in the past. The Respondent has failed to
demonstrate that it would have taken this action in the absence
of the past protected activities of the unions.
b. The 8(d) defense
The Respondent also argues that it cannot be found to have
discriminated for not giving union-represented employees the
day off because the benefit is not in the collectively-bargained
agreements. Obviously, the contracts do not provide for appreciation day, it not having been contemplated at the time the
contracts were negotiated. The Respondent contends (R. Br. at
24) that it may
rest on its rights under Section 8(d) [of the Act] not to be required “to discuss or agree to any modification of the terms
and conditions contained in a contract for a fixed period . . .”
See 20 U.S.C. 158(d). Similar to the strategy of Merck’s unions not to consider negative adjustments to their contractual
terms and conditions of employment until negotiations for
new agreements were underway, the Company’s strategy was
to wait until negotiations to consider proposing additional
days off.
Doubling down on this view, the Respondent devotes an entire subsection of its brief (R. Br. at 29–30) to the argument that
Section 8(d) provides “a statutory right” not to bargain over the
appreciation day benefit and that
to find a Section 8(a)(3) violation based on an employer’s refusal to discuss a mid-term modification would essentially
read Section 8(d) out of the Act. An employer either has a
right under Section 8(d) to rest on its contractual rights or it
does not.
The Respondent’s contention is wrong. Section 8(d) of the
Act, by its terms, defines what it means to “bargain collectively,” the refusal to do so being an unfair labor practice pursuant
to Section 8(a)(5) of the Act. But nothing in Section 8(d) or
Section 8(a)(5) speaks to whether an employer’s actions violate
Section 8(a)(3)—which is what is at issue here—or whether the
employer is acting “by discrimination in regard to . . . any term
or condition of employment to encourage or discourage membership in any labor organization.” The Respondent’s contention that Section 8(d) immunizes it from discrimination claims
is without support in law or logic. Employees working under a
collective-bargaining agreement can be discriminated against
without regard to whether an employer’s actions also violate a
bargaining obligation, or, for that matter, contractual obligations. The statutory duty to bargain and the statutory duty not
to discriminate are distinct and independent obligations under
the Act.12
12 While uncommon, instances of a discriminatory application of
benefits by an employer during a collective-bargaining agreement that
do not violate the Sec. 8(a)(5) bargaining obligation do arise. See, e.g.,
Reebie Storage and Moving Co., 313 NLRB 510 (1993) (employer did
not violate Sec. 8(a)(5) by failing to apply contract to all eligible unit
members but only to union members, but “identical” conduct violated
Section 8(a)(3) based on unlawful discrimination of providing greater
remuneration and superior benefits to union employees than to nonunion employees); enft. denied on other grounds 44 F.3d 605 (7th Cir.
1995); Esmark, Inc., 315 NLRB 763 (1994) (Board does not find factu-
MERCK, SHARP & DOHME CORP.
I note that under the Respondent’s theory of 8(a)(5) and 8(d)
immunity for discriminatory conduct, an employer would be
free to announce to employees that, for the express purpose of
encouraging union-represented employees to decertify their
unions, it will provide $1000 to each of its unorganized employees, and not to any of its union-represented employees
working under a collective-bargaining agreement. The difference between this hypothetical case and Merck’s actions is one
of degree not kind. Both cases turn on an assessment of the
motives for not providing the benefit to union-represented employees. In both cases a violation of 8(a)(3) is the correct conclusion if the employers’ actions were unlawfully motivated.
The existence of a contract does not shield the employer from
liability for antiunion discrimination.
Critical to its error is Merck’s assumption of equivalence between the unions’ past refusal to accede to requests for midcontract changes, and Merck’s refusal to offer the appreciation
day. The comparison is specious, and goes to the heart of
Merck’s misreading of its obligations under the Act. Respondent’s suggestion of “tit-for-tat” does not permit it to discriminate. What we have here is a decision to exclude unionrepresented employees from a day off offered to all other employees because of their unions’ previous lawful bargaining
conduct. Section 8(a)(3) proscribes an employer from making
discriminatory decisions about employee terms and conditions
that are motivated by employees’ union affiliation. By contrast,
the union conduct for which Merck is retaliating is free of any
suggestion of discrimination, or even any statutory basis for
condemning such discrimination against an employer were it
proved.
Whether or not the General Counsel should have or could
have mounted an 8(a)(5) case against Merck does not implicate
the issue of whether the Respondent engaged in unlawfully
motivated discrimination by refusing to provide the day to employees. Indeed, the Respondent concedes as much by agreeing
al basis to pierce veil and hold parent of employer liable for 8(a)(5)
bargaining violation for abrogation of contract but finds parent liable
under Sec. 8(a)(3) for same sham closing and reopening of facility).
More commonly, but also illustrative of the point, are cases in which
both an 8(a)(5) and an 8(a)(3) violation is found based on the same or
similar conduct, but the violations are separately analyzed and independent of one another. See, e.g., Covanta Energy Corp., 356 NLRB
706 (2011) (elimination of corporate bonus and recommended annual
wage increase separately analyzed and independently found to be violation of Sec. 8(a)(3) and 8(a)(5)); Phelps Dodge Mining Co., 308 NLRB
985 (1992) (separate analysis of 8(a)(3) and 8(a)(5)), enft. denied 22
F.3d 1493 (10th Cir. 1994). Alternatively, sometimes the Board finds it
unnecessary to reach an 8(a)(3) allegation because, having found the
same conduct to have been an 8(a)(5) violation, an additional violation
would not materially affect the remedy. See, e.g., Alamo Rent-A-Car,
362 NLRB 1091, 1093 fn. 8 (2015), 831 F.3d 534 (D.C. Cir. 2016);
Bryant & Stratton Business Institute, 321 NLRB 1007, 1007 fn. 4
(1996). And vice-versa. See, e.g., Advanced Life Systems, 364 NLRB
No. 117, slip op. at 3 fn. 8 (2016) (Board does not reach 8(a)(5), because, having found the same conduct to have been an 8(a)(3), additional violation would not materially affect the remedy. Sutter Roseville Medical Center, 348 NLRB 637, 637 fn. 7 (2006) (same). But in
no case does the Board hold that the lack of finding of an 8(a)(5) violation precludes the finding of an 8(a)(3) violation.
19
(R. Br. at 18; R. Exh. 1 at 3), correctly, that Wright Line and its
assessment of the Respondent’s motivation is the appropriate
basis for deciding this case.
In short, employers are not required to engage in midcontract bargaining (over matters waived in a collectivelybargained agreements). But an employer cannot refuse to do so
for unlawful reasons, in this case, in admitted retaliation for a
union’s previous bargaining conduct. 13
C. The allegations relied upon to find the violation are closelyrelated to the pleadings and fully litigated
While the General Counsel argues on brief (as I have found)
“that even Killen’s own version of his conversation with [union] officials demonstrates that Merck’s decision to exclude
was unlawfully motivated” (GC Br. at 23 fn. 12) (citation omit13 Respondent’s position is meritless without regard to its premise
that it had no duty to bargain about appreciation day and did not violate
the Act by refusing to bargain about this new appreciation day. However, I note that even this premise is in question and unproven. No
bargaining violation is alleged, but Merck’s assumption that it could
not have been is far from certain. It rests on the untested and nonevident claim that because the unions’ contracts with Merck contain other
holidays, the unions have clearly and unmistakably waived the right to
bargain about appreciation day (which is not a holiday in the contract).
However, waiver is not lightly inferred and must be “clear and unmistakable.” See Metropolitan Edison v. NLRB, 460 U.S. 693, 708 (1983).
The party asserting waiver must establish that the parties “unequivocally and specifically express[ed] their mutual intention to permit unilateral employer action with respect to a particular employment term,
notwithstanding the statutory duty to bargain that would otherwise
apply.” Provena St. Joseph Medical Center, 350 NLRB 808, 811
(2007). As the Board explained in Empire Pacific Industries, 257
NLRB 1425, 1425 (1981):
As further set forth in B. F. Goodrich, an employer is under a duty to
bargain during the existence of a collective-bargaining agreement concerning any mandatory subject of bargaining which has not been specifically covered in the contract and which the union has not clearly and
unmistakably waived. [Footnote omitted.] Thus, where an employer
grants a benefit to a group of unrepresented employees, if the benefit is
a mandatory subject of bargaining which is not specifically covered by
the represented employees’ collective-bargaining agreement and has
not been clearly and unmistakably waived by the union, the employer is
obligated to bargain with the union concerning the implementation of
this benefit for the represented employees. In such a situation, the
failure to bargain in good faith with the union over the benefit granted
constitutes a violation of Section 8(a)(5) and (1) of the Act. L.M. Berry
and Company, 254 NLRB 42 (1981) and B. F. Goodrich, supra. Furthermore, implementing such a benefit for unrepresented employees
while refusing to bargain with the union over the benefit is also a violation of Section 8(a)(1).
See also B.F. Goodrich, 195 NLRB at 915 (“As found by the Trial
Examiner, the Union did not waive its right to be consulted about the
institution of this type of benefit during the parties' negotiation of the
existing collective-bargaining agreement. By thereafter instituting the
plan for its unorganized employees while unlawfully refusing to bargain with the Union as the statutory representative of its warehouse
employees, Respondent deprived the latter employees of their right to
bargain collectively with respect to obtaining this additional benefit.
As such conduct interferes with, restrains, and coerces the unit employees in the exercise of their right to bargain collectively through representatives of their own choosing, we conclude that Respondent thereby
further violated Section 8(a)(1)”).
20
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ted), I recognize that the General Counsel chiefly argued that
the “labor troubles” at Rahway and West Point were the motivation for the Respondent’s unlawful conduct. This was based
on the alleged comments of Killen to Vallo and Little that I
have not credited. More formally, the complaint (GC Exh. 1(u)
at para. 9) attributed Merck’s actions generally to “concerted
activities” of employees represented by the charging party unions, an allegation that covers Zingales’ credited admission of
Merck’s motivation for excluding union employees from appreciation day, which Killen then conveyed to Vallo. While the
credited motivation is different from that primarily advanced by
the General Counsel at trial, it is within the scope of the pled
allegation. (See GC Exh. 1(u) at para. 9). Thus, there is no due
process issue, as the complaint alleged, and, indeed, the trial
focused on whether the Respondent’s motivation for its failure
to provide union-represented employees with the appreciation
day violated Section 8(a)(3) of the Act. That is to say, the finding of unlawful motivation “is closely connected to the subject
matter of the complaint and has been fully litigated.” Pergament United Sales, Inc., 296 NLRB 333, 334 (1989), enfd.
920 F.2d 130 (2d Cir. 1990); Casino Ready Mix, Inc., 335
NLRB 463, 464 (2001), enfd. 321 F.3d 1190 (D.C. Cir. 2003).
And that is particularly so here, where “the finding of a violation is established by testimonial admissions of the Respondent’s own witnesses.” Id. The Respondent, on direct examination of its own witness, supplied the answer to the question of
the motive for its actions and proved the unlawful motivation.
There was no objection to the relevant evidence; indeed, it was
repeated and reaffirmed on cross-examination (Tr. 265) and
reasserted in the Respondent’s brief. (See R. Br. at 13−14.) It
is no defense to an allegation of unlawfully motivated conduct
to admit to a (slightly) different unlawful motive for the conduct.
I find that the Respondent violated Section 8(a)(3) and (1) of
the Act by discriminatorily failing to provide appreciation day
to union-represented employees.
II. SECTION 8(A)(1)
The Board will find a supervisory statement to violate Section 8(a)(1) of the Act where it “would reasonably tend to interfere with, threaten, or coerce employees in the exercise of their
rights under Section 7 of the Act.” Waste Stream Management,
315 NLRB 1099, 1100 (1994).
It is well-settled that in evaluating the remarks, the Board
does not consider either the motivation behind the remarks or
their actual effect. Miller Electric Pump & Plumbing, 334
NLRB 824, 825 (2001); Joy Recovery Technology Corp., 320
NLRB 356, 365 (1995), enfd. 134 F.3d 1307 (7th Cir. 1998).
Rather, “the basic test for evaluating whether there has been a
violation of Section 8(a)(1) is an objective test, i.e., whether the
conduct in question would reasonably have a tendency to interfere with, restrain, or coerce employees in the exercise of their
Section 7 rights, and not a subjective test having to do with
whether the employee in question was actually intimidated.”
Multi-Ad Services, 331 NLRB 1226, 1227–1228 (2000)
(Board's emphasis), enfd. 255 F.3d 363 (7th Cir. 2001).
Killen’s explanation to Vallo about why Merck refused to
provide the union employees with appreciation day was, by all
evidence, offered in good faith, without his endorsement, and in
an effort to answer Vallo’s questions about Merck’s motives for
a decision with which Killen disagreed. It might seem counterintuitive to condemn as a separate violation of the Act a manager’s frank discussion with a union representative about an
employer’s motives for an adverse decision, all the more so
when it reveals an otherwise hidden and unlawful motive. Yet,
Killen’s intentions aside, as they must be put, the message
would have reasonable tendency to interfere with Vallo’s protected activity. Specifically, his decisionmaking in his representative capacity when next approached by management seeking midterm concessions. His participation as local union president is core Section 7 activity, and there is a reasonable tendency that informing an employee that these decisions have led
to retaliation against bargaining unit members will interfere,
threaten, and coerce. I recognize that it does not appear that
Vallo (or Little) recalls Killen saying this—they testified to a
different allegedly unlawful explanation by Killen—but under
the objective test employed by the Board, that is not the relevant inquiry. I believe Killen. I believe he said it and accurately reported what he was told by Zingales. In doing so, he violated the Act. Alamo Rent-A-Car, 362 NLRB 1091, 1092 fn. 3
(managers’ statements to unit employees that they were losing
STD benefits “because of their union contract” but that nonunion employees would retain a form of the benefit violates
8(a)(1)); Goya Foods of Florida, 347 NLRB 1118, 1131 (2006)
(comment that employees would be unable to participate in the
company’s pension plan if they were union members violates
8(a)(1)).14
CONCLUSIONS OF LAW
1. The Respondent, Merck, Sharp & Dohme Corp., is an
employer within the meaning of Section 2(2), (6), and (7) of the
Act.
2. The Respondent violated Section 8(a)(3) and (1) of the
Act by discriminatorily denying union-represented employees a
paid day off in retaliation for union activity protected by the
Act.
3. The Respondent violated Section 8(a)(1) of the Act by informing employees that the Respondent was denying unionrepresented employees a paid day off in retaliation for union
activity protected by the Act.
4. The unfair labor practices committed by the Respondent
affect commerce within the meaning of Section 2(6) and (7) of
the Act.
REMEDY
Having found that the Respondent has engaged in certain unfair labor practices, I find that it must be ordered to cease and
14 While Killen’s statement differed from the one alleged by the
General Counsel, it occurred in the same time frame, concerned the
same subject (i.e., the Respondent’s motive for excluding unionrepresented employees from appreciation day), was made by the same
supervisor to the same union representative, and came into evidence
during Killen’s direct testimony through his admission. The matter “is
closely connected to the subject matter of the complaint and has been
fully litigated.” Pergament United Sales, Inc., 296 NLRB at 334; Casino Ready Mix, Inc., 335 NLRB at 464.
21
MERCK, SHARP & DOHME CORP.
desist therefrom and to take certain affirmative action designed
to effectuate the policies of the Act.
The Respondent shall make whole the union-represented
employees for any losses of earnings and other benefits they
suffered as a result of its discriminatory denial to them of the
paid day off known as appreciation day.
The make-whole remedy shall be computed in accordance
with Ogle Protective Service, 183 682 (1970), enfd. 444 F.2d
502 (6th Cir. 1971), with interest as prescribed in New Horizons, 283 NLRB 1173 (1987), and compounded daily as prescribed in Kentucky River Medical Center, 356 NLRB 6 (2010).
In accordance with Don Chavas, LLC d/b/a Tortillas Don Chavas, 361 NLRB 101 (2014), the Respondent shall compensate
any employees adversely affected by the unlawful conduct for
the adverse tax consequences, if any, of receiving lump sum
backpay awards, and in accordance with AdvoServ of New Jersey, Inc., 363 NLRB No. 143 (2016), the Respondent shall,
within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, file with the Regional Director for Region 6 a report allocating backpay to the appropriate
calendar year for each employee. The Regional Director will
then assume responsibility for transmission of the report to the
Social Security Administration at the appropriate time and in
the appropriate manner.
The Respondent shall post an appropriate informational notice, as described in the attached appendix. This notice shall be
posted at all of the Respondent’s facilities employing unionrepresented employees who were denied appreciation day, and
at such facilities shall be posted wherever the notices to employees are regularly posted for 60 days without anything covering it up or defacing its contents. In addition to physical posting of paper notices, notices shall be distributed electronically,
such as by email, posting on an intranet or an internet site,
and/or other electronic means, if the Respondent customarily
communicates with its employees by such means. In the event
that, during the pendency of these proceedings the Respondent
has gone out of business or closed a facility involved in these
proceedings, the Respondent shall duplicate and mail, at its
own expense, a copy of the notice to all current employees and
former employees employed by the Respondent at any time
since September 4, 2015. When the notice is issued to the Respondent, it shall sign it or otherwise notify Region 6 of the
Board what action it will take with respect to this decision.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended15
ORDER
The Respondent Merck, Sharp & Dohme Corp., Kenilworth,
New Jersey, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a)
Informing employees that it is denying unionrepresented employees a paid day off in retaliation for union
activity protected by the Act.
If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for
all purposes.
15
(b) Discriminatorily denying union-represented employees a
paid day off in retaliation for union activity protected by the
Act.
(c) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of the Act.
(a) Make union-represented employees who were denied the
paid day off known as appreciation day whole for any losses of
earnings and other benefits suffered as a result of the discrimination against them, in the manner set forth in the remedy section of the decision in these cases.
(b) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause
shown, provide at a reasonable place designated by the Board
or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other
records, including an electronic copy of such records if stored
in electronic form, necessary to analyze the amount of backpay
due under the terms of this Order.
(c) Within 14 days after service by the Region, post at its facilities where any union-represented employee was denied the
paid day off known as appreciation day copies of the attached
notice marked “Appendix.”16 Copies of the notice, on forms
provided by the Regional Director for Region 6, after being
signed by the Respondent's authorized representative, shall be
posted by the Respondent and maintained for 60 consecutive
days in conspicuous places, including all places where notices
to employees are customarily posted. In addition to physical
posting of paper notices, notices shall be distributed electronically, such as by email, posting on an intranet or an internet
site, and/or other electronic means, if the Respondent customarily communicates with its employees by such means. Reasonable steps shall be taken by the Respondent to ensure that the
notices are not altered, defaced, or covered by any other material. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed any
facility involved in these proceedings, the Respondent shall
duplicate and mail, at its own expense, a copy of the notice to
all current employees and former employees employed by the
Respondent at any time since September 4, 2015.
(d) Within 21 days after service by the Region, file with the
Regional Director for Region 6 a sworn certification of a responsible official on a form provided by the Region attesting to
the steps that the Respondent has taken to comply.
Dated, Washington, D.C. December 20, 2016
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
16 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
22
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we violated
Federal labor law and has ordered us to post and obey this notice.
WE WILL make union-represented employees to whom we
discriminatorily denied the paid day off known as appreciation
day whole, with interest, for any loss of earnings or other benefits suffered as a result of our discrimination against them.
MERCK, SHARP & DOME CORP.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and
protection
Choose not to engage in any of these protected activities.
WE WILL NOT tell you that we are denying union-represented
employees a paid day off in retaliation for union activity protected by the Act.
WE WILL NOT discriminatorily deny union-represented employees a paid day off in retaliation for union activity protected
by the Act.
WE WILL NOT, in any like or related manner interfere with,
restrain, or coerce you in the exercise of the rights listed above.
The Administrative Law Judge’s decision can be found at
www.nlrb.gov/case/06-CA-16315 or by using the QR code
below. Alternatively, you can obtain a copy of the decision
from the Executive Secretary, National Labor Relations Board,
1015 Half Street, S.E., Washington, D.C. 20570, or by calling
(202) 273-1940.